While California’s black market for cannabis is still attracting more money than legal cannabis-based businesses, an analysis reported by the Sacramento Bee believes that trend will change in the next five years.
“A good number of California’s legal cannabis businesses are finding out they can compete, with their convenient, modern storefronts and delivery services, and branded edibles, concentrates, topicals and other products the illicit market largely doesn’t offer,” according to the BDS Analytics report entitled, “California: Lessons from the World’s Largest Cannabis Market.’
However, most consumers prefer the underground market to meet their cannabis needs due to the high prices of the legal industry.
Splitbud, a cannabis tech startup based in Los Angeles, is hoping to bring affordability to the legal cannabis market.
“Our goal at Splitbud is to transition the unregulated market consumer into the legal market in a realistic way, by offering cannabis deals that are competitive to the underground market prices,” Alice Moon, director of communications at Splitbud, said in a press release.
According to the aforementioned BDS Analytics report, California’s legal cannabis market is expected to earn $3.1 billion this year. However, the underground market is estimated to earn almost three times as much, at $8.7 billion in revenue.
“The Bureau of Cannabis Control has recently launched a marketing campaign in an attempt to convince the unregulated market consumers to purchase from the legal market, and while we applaud their efforts, we know that billboards are not enough,” Alice explained. “Until California lowers taxes, consumers are on track to continue their current purchasing habits, despite the risk of buying tainted product.”
The platform partners with brands, cultivators and distributors to negotiate bulk pricing on tested, licensed and safe cannabis products, such as concentrates, edibles, flowers and vapes. Customers can order their products for pickup or on-demand delivery.
Medical consumers must be at least 18 years old, whereas general users of the site need to be 21 years old or older. After signing up, users need to verify their age with a state-issued driver’s license, state-issued ID card or passport. Medical consumers also need to upload their MM ID card and a phone number to receive texts and calls.
In the two months since the company’s soft launch, over 3,000 users have joined the platform. Splitbud plans to focus on the local Los Angeles market before expanding throughout California and to other states with a legal cannabis industry.
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