Cannabis sales in San Francisco have failed to hit the $50 million mark for the quarter for the first time in five years, California tax officials said. 

The city recorded $46.7 million in taxable cannabis sales in the first three months of 2024. The figure represents a $5.6 million decrease from the last quarter and a $7.1 million decrease from the same period in 2023, the San Francisco Examiner reported. 

The latest figures from the California Department of Tax and Free Administration show a 35% decline since its peak in mid-2021. Despite the sluggish sales, San Francisco users remain among the leaders in per-capita cannabis sales, bringing in $55 in sales per resident. San Diego made $134.1 million in sales for the first quarter, with $40.73 in sales per resident. Los Angeles came in at $295.3 million in sales with $30.05 per resident. 

Democratic Gov. Gavin Newsom has often touted California as being the largest legal cannabis market in the world and has bragged about San Francisco’s Amsterdam-style cafes, but more and more dispensary owners say they are being driven out of business. 

Owners have complained for months that it’s been a challenge to draw in customers and say they can’t compete with black market operations. 

“We’re charging our customers way too much,” Nate Haas of Moe Greens Dispensary & Lounge told CBS News Bay Area. “As a dispensary, it’s tough for us to compete with the illicit market.” The industry has also been hit with market saturation and a severe post-pandemic drop in customers. 

“Our revenue has dropped 43% in the last 18 months,” Al Shawa, who owns Mission Cannabis Club on Mission Street near 21st Street, a mainstay in the neighborhood since 2010, told Missonlocal.org. 

Shawa owns two other dispensaries that opened in 2023, one in the Marina District and another in the city’s Russian Hill area.

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“There’s no money to be made,” he said. 

Neither store is doing well.