With a long history in Sonoma County, the cannabis industry has new challenges and opportunities as a result of Proposition 64 passing and recreational use of cannabis being legal for adults over 21 starting on January 1, 2018. This study estimates the economic impacts from the current state of the legal cannabis business. Conversion of current, illegal businesses and the expansion of new businesses can lead to broader economic impacts. This study was sponsored by several Sonoma County cannabis businesses; this report is not advocating a position for or against cannabis consumption. This report instead shows the gains and economic consequences from more cannabis businesses coming to Sonoma County rather than locating elsewhere or remaining illegal. The cannabis supply chain, like any other agricultural good, determines its ability to support a broad number of industries and jobs regionally. Local agriculture is likely to produce more products than can be sold within Northern California, which implies export possibilities. As of 2018, the legal cannabis market cannot legally sell products outside California; for Sonoma County cannabis businesses, one challenge is to optimize cultivation, manufacturing, distribution, and retail business opportunities inside the county. This balance between leakages (losses of revenue to vendors outside the local area) and exports (sales outside Sonoma County) is a major part of economic development for any industry. Recent data collected by this study’s authors, and available from sources such as BDS Analytics, provide the baseline data as of July 1, 2018.

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