The State of California said Wednesday it took in $221.65 million in tax revenue from legal cannabis sales in the fourth quarter, down from $330.53 million in the year-ago period. Taxable sales of cannabis fell to $1.27 billion in the fourth quarter from $1.45 billion in the year-ago period. The state recorded zero dollars in cultivation tax in the fourth quarter, compared to $40.1 million in cultivation tax in the year-ago quarter. California eliminated the cultivation tax starting in the third quarter of 2022. Sales of legal cannabis in California have been challenged by competition from the illicit market partly because of the state’s long-time role as a major exporter of illegal cannabis from the so-called Emerald Triangle of Humboldt County, Mendocino County and Trinity County in the northern part of the state. The AdvisorShares Pure US Cannabis ETF MSOS is down 68.9% in the past year and the ETFMG Alternate Harvest ETF MJ has lost 55.5% of its value, while the Nasdaq Composite Index COMP is lower by 11.5% in the past year.

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