Legal sales of recreational marijuana soared 94% last year from 2021's total. But the growth hasn't always been easy, and there's concern the market is becoming overcrowded.
Recreational cannabis sales last year in Maine rang up nearly double the dollars of 2021 sales.
The state’s licensed adult-use retailers reported nearly 2.5 million sale transactions, totaling $158.9 million, according to data released last week by the Maine Office of Cannabis Policy. The 2021 total was $82 million.
Last year’s sales also earned the state roughly $16 million in tax revenue.
John Hudak, director of the office, said the numbers show the legal cannabis industry can work and thrive in states that regulate the market.
But there’s more to it than just increased revenue, he said.
“(The growth) reflects the significant economic impact that legal cannabis continues to have in the communities that have opted into the system,” he said. “The system is creating jobs, helping revitalize communities, and having a positive economic impact on businesses that help the industry function.”
Hudak expects continued growth in 2023.
“More communities are recognizing this potential and are leaving behind outdated stigma about this industry,” he said.
Sales have come a long way from the roughly $1.4 million reported during the Maine market’s first full month of operation in October 2020. In fact, they set a new record each month through August 2022, which brought in over $17 million.
Not far behind that peak, December saw sales of $15.2 million.
While the growth of legal cannabis has been substantial, it hasn’t been without challenges. Industry professionals say the market is oversaturated. Regulations and the cost of doing business can still be prohibitive, there aren’t enough testing labs, and a lack of cannabis-friendly banks can cause financial havoc.
At the start, the industry struggled with limited supply and high costs. Now, with 114 stores, 56 manufacturing facilities, 87 cultivation sites and three testing labs, buyers are seeing more variety and lower prices.
The average price of smokable marijuana flower has been cleaved in half from $16.68 per gram at market launch to $8.18 per gram as of December. The average joint contains between 0.32 and 0.5 grams of cannabis.
Kaspar Heinrici, director of business development at Seaweed Co., said he’s noticed “emerging sophistication” as the market has matured and more products have come into circulation. Customers are also a bit more educated about what they want.
Edible marijuana products, in particular, have increased in number and variety, he said, although flower still accounts for the lion’s share of sales.
The industry’s growth trajectory is not likely to change anytime soon – the state has another 97 stores, 48 manufacturing facilities, 75 cultivation sites and two additional labs in various stages of the approval process.
But some people in the industry say that’s not necessarily good news.
While sales numbers have doubled, the growth more reflects the increase in stores than an increase in customers, Heinrici said. As more shops pop up, sales volumes may actually be diluted.
Meanwhile, the number of testing labs is far from keeping pace. Testing prices are high to begin with, but with only three labs licensed to serve 114 stores, the lack of competition keeps prices up, Heinrici said.
That price is pushed onto the consumer, forcing prices higher and putting the recreational market at a disadvantage to the medical one. Maine doesn’t require medical cannabis to be tested.
‘IT’S ALL CANNABIS’
Heinrici has noticed more alignment between medical and adult-use businesses, and many medical marijuana merchants have converted to recreational sales.
“That’s something we are trying to promote, the idea that it’s all cannabis … At the end of the day what we all want is for people to have access to cannabis and have access to the best quality at the best price,” he said.
The Joint.me, a rock-and-roll-themed dispensary in Portland, has only been operating in the adult-use market for a few weeks. The store opened as a medical dispensary in August and converted to recreational use Dec. 24.
Owner George Irwin said the switch was driven by the need to expand the store’s clientele and a desire to be in a more tightly regulated market.
“Cannabis has a bad reputation of originally being a black-market industry and we didn’t want that reputation,” he said. Plus, “Maine is a huge vacation state … we want to be part of that” and serve people who come from out of state.
Megan Turbide, general manager, said that before the transition, she had to turn away as many as 10 people a day. Since converting to adult-use, there has been a marked increase in foot traffic.
Maine’s rollout of legalized adult-use cannabis was the slowest in U.S. history. The launch of the regulated market took almost four years after voters approved legalization in 2016. The process was slowed by legislative rewrites of marijuana laws, gubernatorial vetoes, a change in gubernatorial leadership and the coronavirus pandemic.
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