Legal cannabis sales are on a bad trip in the latest sign of a reckoning for the once-booming industry

Taxable sales in California fell 8.3% last year to $5.3 billion, the state department that manages the collection of business taxes and fees said last week. Part of the decline was due to the elimination of cultivation taxes,

In Colorado, marijuana sales fell 20% to $1.8 billion during the same period, according to the state revenue department. Meanwhile, in Washington state, retail revenue for fiscal 2022 fell 8% to $1.4 billion.

The annual decline, a first for all three countries, marks a major reversal from the rapid growth of previous years. The initial optimism led to numerous retail stores, a mini-industry of cannabis equipment suppliers, and an army of wholesale cannabis manufacturers.

During the pandemic, when many people are working from home and have limited entertainment options, sales of marijuana have increased. At the same time, the state treasury is filled by increasing the amount of tax from the sale of cannabis.

But that changed last year as the economy slowed, prompting some to cut back on spending. In addition, many workers return to work, leaving less time for recreational marijuana use.

These factors, coupled with increased competition from unlicensed weed dealers who charge lower prices for their products, have created a huge drag on legal pot sales. Retail stores, like any business, have to deal with fixed costs like rent, facing certain pressures.

For example, MedMen, the cannabis retail chain known as the “Apple Cannabis Store,” has warned investors that it is close to financial collapse. It was once valued at $1.7 billion as a publicly traded company in Canada, but is now valued at just $33 million and has closed some stores to cut costs.