As year two of legal cannabis sales in California comes to a close, shoppers are still more likely to buy marijuana from illicit sellers than from state-sanctioned stores that pay taxes and test their products for safety.

California’s 7,000 licensed cannabis businesses — and the state’s tax revenue — are feeling the pinch.

Prominent cannabis companies that a year ago were growing aggressively have, in recent months, laid off hundreds of workers. They say hefty taxes, onerous regulations and competition from a thriving illicit market are forcing them to scale back operations.

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