There is no question that legalized marijuana sales in California could be big. The State Bureau of Marijuana Control estimates that cannabis sales will total $7.7 billion dollars. Of that amount, they estimate $2 billion a year will be for medical use and $5.7 billion will be for recreational use. The big payoff is the estimated $1 billion in tax revenue and the more than 1,200 jobs that will be generated because of those sales[1].

While $7.7 billion is big, let’s put that in perspective. According to the Wine Institute, wine sales in California totaled $34.1 billion in 2016. The California State Auditor reports that tribal gaming revenues totaled $7.9 billion. So, where will marijuana fit in the tourism portfolio of Destination Marketing Organizations? To answer this question, we can look at two different studies done in Colorado where recreational cannabis has been legal since January 2014.

Colorado’s Findings

In 2015, the state tourism office spent $5.3 million to run a “Come to Life” campaign that discreetly alluded to the new situation in Colorado. A study commissioned by the Colorado Tourism Office showed that of those who were exposed to the advertisements, legal marijuana was a growing motivator for people to visit the state[2]. However, the study had some conflicting results. Fully 49% indicated that marijuana laws influenced their vacation decision, but only 8% indicated they visited a marijuana dispensary. Of that 8%, fully 85% indicated that marijuana was a primary motivator in their decision to

take a trip. The study estimated that the campaign generated 2.1 million leisure trips with an economic impact of $2.6 billion.

That study contrasts significantly with another study conducted by Professor Lorraine Taylor of Fort Lewis College. She studied five marijuana shops across three Southwest Colorado Counties[3]. Her study (a much more limited study) indicated that visitors were not coming to Colorado specifically for marijuana.

Where does this leave cannabis tourism in California? It’s a hard to say. While the state’s most recent report conducted by the University of California Agricultural Issues Center boasts significant numbers, a deeper look indicates that most of that money is already being spent on marijuana. The difference will be a lot of it (the state hopes) will now be sold through legal, regulated and taxable channels. It’s a big question.

Yes, some consumers will feel better about buying their pot through legal channels which offer high- quality control and strict guidelines. The price may be expensive and some who buy through illegal channels will feel just as comfortable buying pot as they always have. The state estimates that approximately 61% of all marijuana sales will be through legal channels, 30% will be illegally purchased and 9% of sales will be medical purchases.

Implications for California Tourism

What does it mean for tourism? Given that adult use of cannabis is illegal in many states, legalized pot may attract some visitors. The challenge, however, is pot exists in every market. What could make the difference is the California brand, especially pot from long-standing and recognized locations for producing high-quality varieties, specifically Mendocino, Humboldt and Trinity Counties.

It is anticipated that, like other markets, there will be a small segment of aficionados that really seek out the highest quality and choices. They may in fact be willing to visit to specifically purchase California pot.

Some have suggested that California marijuana tourism will emulate California wine tourism. In some sense, it might be an experience with tasting rooms and meeting the grower, but it’s doubtful the volume will be there from a tourism perspective. Unlike wine, where consumers might stop and taste wine at several wines tasting rooms, it’s hard to see someone trying different strands of pot and visiting several different locations.

Roger King, a long-time wine grape grower from Suisun Valley and owner of King Andrews
Vineyards, has an interesting take. King suggests that marijuana tourism does not have a culture like wine to enhance travel. Hundreds of years of wine and its incorporation with food and a sense of place where grapes are grown have created a compatible culture of travel where marijuana so far has not.

Based on this information and what we foresee, pot tourism does not need to fit prominently in a DMO’s marketing efforts. Maybe we can learn from the legalization of tribal gaming. As mentioned, tribal gaming is about $7.9 billion in California, close to the projected legal marijuana market. But while tourism promotion of the wine experience is significant, the promotion of gaming is a mixed bag. SMG studied sixteen counties that have both a wine industry and casinos and found that of the sixteen, only slightly over 40% promote gaming and most of those barely do it. Typically, it’s a web connection on the

DMO website and not much more. If gaming promotion by DMO’s is any indication, marijuana tourism promotion by this channel might be limited.

Why? DMO’s are a bit queasy about promoting anything they see as controversial and they don’t want to impact and alienate long-standing efforts to attract families. That’s not to say they won’t do it eventually, but it will take time. That scenario could change if pot dispensaries pulled together their own cooperative tourism promotion efforts or work with a DMO and provide funding for promotion efforts.

Takeaways

What does it all mean?

1. Lots of money will be spent through legal and regulated channels in California providing the state with an estimated billion dollars in new taxes.

2. There will be some visitation because of California’s reputation for quality and we think this will be a niche market.

  1. Marijuana availability will be a positive factor in some visitors travel decisions.
  2. Some destinations will promote the availability of marijuana in a limited way if at all. We do

anticipate, however, extensive promotion of marijuana travel outside of the formal tourism promotion organization. There are already websites and guides for elite marijuana tourism. Again, we think that will primarily be serious aficionados.

There is no question marijuana will become part of the tourism landscape in California. The question is the size, scope and how it’s promoted.

It is interesting to note that Visit California has long promoted a variety of tourism messages including attractions, activities, food and wine. It’s also interesting to note that they have not done the same for gaming, which may indicate how marijuana tourism gets promoted.

[1] Los Angeles Times June 11, 2017 [2] Denver Post, December 9, 2015 [3] The Durango Herald, Dec 6, 2015