December 2018 Retail Cannabis Sales in Massachusetts Up Nearly 46% Compared to Sales in January 2018
A recent report from the Associated Press points out that adult-use retailers in Massachusetts have generated nearly $24 million in revenue in the first two months of sales. Notably, only two storefronts were licensed to serve general consumers for the first few weeks after sales commenced. In January, information from the state Cannabis Control Commission (CCC) shows that eight retailers have received permission to commence sales to the general adult public.
The most recent official sales data from the CCC states that adult-use retailers in Massachusetts generated over $3.36 million in revenue in the seven-day period from January 14th through the 20th, 2019. That is an increase of almost 30% compared to the first full week of adult-use sales – from November 26th through December 2nd, 2018 – which saw the first two storefronts to open generate over $2.58 million in gross sales. (Adult-use sales commenced in Massachusetts on November 20, 2018, but due to the fact that date was a Tuesday, combined with the Thanksgiving holiday, only five days of sales took place in the Monday-Sunday span used by the CCC in its reports.)
Average per-unit prices have also increased since the opening of the adult-use market in Massachusetts. A “unit” is any single item sold by a retailer, be it a package of edibles, concentrates, or pre-weighed flower, among other possibilities. In the week ending December 2nd, the average price of an item purchased by consumers was $39.68. In the most recent week for which data is available, that mean price has risen by 10.5% to $43.86.
MassLive recently reported that Cultivate, one of the first two storefronts to open for business, lifted purchase limits for customers shopping on weekdays. Purchase limits were put in place by the business itself and capped the transaction of a single customer at an eighth of an ounce of flower, two pre-rolled cannabis cigarettes, and one package of edibles, restrictions that will still be in effect on weekends. However, during the week consumers will be permitted to buy up to an ounce of flower, the legal limit for single purchases in Massachusetts. Other retailers have put purchase limits in place as well in the early weeks of adult-use sales.
Whether Cultivate’s lifting of its purchase limit on weekdays is due to increased supply or sales becoming more dispersed among the more numerous shops that are now open is unknown. Cultivate previously did not respond to multiple requests from Cannabis Benchmarks for an interview.
As of last week, Massachusetts’ Spot Index had risen by 11.7% since the week ending November 23, 2018, which was the first one in which adult-use sales took place. All the retailers that have received permission to commence operations are integrated vertically with commonly-owned cultivation and product manufacturing businesses and have been running in the state’s medical cannabis market for some time.
Still, the transfer of inventory from an operation’s medical license to its adult-use one allowed under state rules has undoubtedly tightened supply somewhat in the state’s medical market, which grew significantly over the course of 2018. In December 2018, medical cannabis dispensaries in Massachusetts sold about 2,458 pounds of product, according to state data. That figure is up by about 46% compared to January 2018’s sales volume of 1,678 pounds.
Whether demand in the state’s medical market will level off or decrease as licensed adult-use retailers become more widespread remains to be seen. Typically, such an occurrence is not observed to take place until prices in a state’s adult-use system decrease to the point that retail rates are low enough to make the cost of becoming a registered patient not worth the tax exemption that results from that status.