'Making a go of it.' $5B in Cannabis sales statewide is no surprise
A recent report from the Cannabis Control Commission that sales of recreational marijuana in Massachusetts have surpassed $5 billion is no surprise to David O’Brien.
He is the president and CEO of the Massachusetts Cannabis Business Association.
“It’s no longer an experiment,” O’Brien said in a phone interview on Sept. 26. “You’ve got over 500 companies either open or opening in Massachusetts, $5 billion in cumulative sales, $1.4 to $1.5 billion in sales annually, employing over 20,000 people at over 300 retail shops around the state. People are making a go of it.”
And what’s more amazing, he said, was 20% of that gross is paid out in taxes. Between sales (6.25%) and excise (10.75%) taxes and host community agreement fees (3%), that amounts to $1 billion for the commonwealth. Municipalities are collecting about $150 million of that total in the host community agreement fees.
Some believe those numbers could be higher. The data on the commission’s website are self-reported by licensees. The commission admits to the possibilities of inaccuracies in sales and other metrics.
What is clear is the industry is booming, at least for many dispensary owners and operators. O’Brien said the months of June, July and August enjoyed the best sales to date since 2018 when marijuana sales were made legal. According to the commission, sales for June, July and August respectively were $134 million, $137.1 million and $139.9 million.
"Stores are still opening,” O’Brien said. “I think some communities are reconsidering whether to allow cannabis.”
Eastham: Every week of cannabis sales is busier than the week before
Salty Farmers is one of 15 cannabis dispensaries on the Cape and Islands. Sales have followed state trends, according to General Manager Jeff Risk. The Eastham retail store has been open for two years and pretty much every week is busier than the week before, Risk said. The dispensary is in the process of opening their own grow business just a few hundred yards from the dispensary. The 2,000-square-foot facility will provide cannabis that will sell alongside a curated mix of products that include flowers, edibles, vapes and concentrates.
“There’s a lot of good weed out there by people we prefer to buy it from,” Risk said. “We focus a lot on the growing process.”
Massachusetts comes in fourth among the states that allow cannabis sales with $146,154,739 in average monthly sales, according to the cannabis data and market research company BDSA. Total sales through 2023 are projected to reach $1,753,856,870. That number is projected to rise to $43 billion for the country by 2027. The adult use market will represent about $35 billion of that, according to BDSA.
A drop in the price of retail marijuana
The growth in the number of dispensaries has been accompanied by a drop in the price of marijuana. The average retail cost of flower per gram has gone from $14.68 in January 2020 to $6.06 in August 2023, according to the Massachusetts commission. O’Brien attributes it to the supply flooding the market.
"There's over 3.5 million square feet of canopy licensed in Massachusetts, which is a lot of grow potential and supply,” he said. "At some point if there’s so much supply, the wholesale price falls.”
O’Brien said he is waiting to see what happens with the commission after Chairwoman Shannon O’Brien — who is no relation — was suspended Sept. 14. O’Brien has asked a judge to reinstate her. The commission is in the middle of a regulatory review process and has a Nov. 9 deadline to announce proposed changes to regulations that include oversight of host community agreements and their community impact fees.
O’Brien, with the marijuana business association, has been advocating changes in the 3% fee for years. He’s also looking forward to the commission’s implementation of a social consumption license. The license will allow people to consume cannabis on the premises or have an event license.
“They’re still working out the details of what that will look like,” he said. “I just wish the agency would settle down.”
