The Massachusetts cannabis industry is on course to increase sales by 27% year-on-year in 2020, according to market research firm BDS Analytics.
Its data shows that sales reached $587 million in 2019. The firm reported $130 million in sales during January and February combined, pointing to a record breaking Q1.
BDS Analytics now expects sales this year to exceed $745 million, which would represent a 27% increase on 2019. That is despite Gov. Charlie Baker ordering all recreational cannabis stores to close during the coronavirus lockdown.
Marijuana dispensaries have been classified as essential businesses across the rest of the country, allowing them to serve recreational and medical consumers during the COVID-19 crisis. However, the Baker administration has ruled that only medical sales are permitted.
That could lead to a downturn in sales, but it was also reported today that medical marijuana registrations have soared since adult-use stores were closed.
Baker said he was forced to take the extraordinary step because dispensaries in Massachusetts regularly receive out of state shoppers. It is one of the only states in the region with legal adult-use cannabis, and he fears these visitors would exacerbate the coronavirus spread.
Dispensary owners and consumers have protested, but Baker has refused to budge.
Yet BDS Analytics chief executive Roy Bingham believes the state’s industry can continue to flourish. “The successful roll-out of the legal cannabis program across one of the founding states represents a major shift in New England politics and is likely to accelerate the legalization initiatives in other major markets, including New York, as regulators and politicians grow more comfortable with the cannabis industry and face extreme budget pressure caused in part by the financial impact of COVID-19 mitigation measures,” he said.
Bingham pointed out that Massachusetts’ population is 30% larger than Colorado’s, and that Colorado has a $1.7 billion annual legal cannabis trade. However, there are far fewer stores in Massachusetts, which has stymied growth.
The firm believes the potential for Massachusetts is vast, and it predicts the market will reach $1.35 billion in annual sales by 2024. Currently, Massachusetts consumers are spending an average of $140 per month on cannabis products. Initial data suggests that adult-use sales spiked dramatically before the lockdown came into force.
The opinions provided in this article are those of the author and do not constitute investment advice. Readers should assume that the author and/or employees of Grizzle hold positions in the company or companies mentioned in the article. For more information, please see our Content Disclaimer.