Illinois’ legal cannabis market has grown to one of the largest in the country in just a few short years, with sales surpassing the more mature markets in the West, except for California. This article examines September 2023 cannabis sales and market data from Illinois, including analysis of wholesale cannabis price trends in the state.
The Illinois Department of Financial and Professional Regulation (IDFPR) issued September 2023 adult use sales figures recently, along with medical cannabis sales data for the month. Combined adult use and medical sales reached $165.5 million in September, down 0.1% from $165.7 million in August.
September adult use sales reached $139.5 million, up 0.2% from August sales of $139.2 million and up 6.8% year-on-year.
The average price of items sold at adult use retailers continued to decline as the volume of items sold climbed. September 2023 items sold were up 19.1% year-on-year, while the average item price declined 10.3% in the same period, from $42.25 in September 2022.
September medical sales slipped 1.3% to $26 million, from over $26.4 million in August.
We noted last month that while sales revenue has been trending down, the volume of flower sold to patients in August 2023 was up 15.5% year-on-year. Sales volume was fairly steady from August 2023 to September 2023, slipping slightly from 1.27 million to 1.26 million grams of flower, but essentially flat when keeping in mind that September is a shorter month.
The average retail price paid by patients for a gram of flower was $9.90 in September 2023, down 14.7% year-on-year from $11.61 in September 2022.
We noted last month that Illinois’ spot wholesale flower price began its steep dive shortly after the first social equity retail licenses were granted in November 2022. The new licensees introduced additional storefronts into a market that had previously been occupied by 110 retailers, many of which are part of vertically integrated businesses owned and operated by the companies that hold the 21 large production licenses in the state.
As the chart below shows, Illinois’ spot price experienced a brief drop in August before bouncing back. However, price did not recover all the way up to prior levels, instead stabilizing a bit under, rather than above, the $2,300 per pound threshold.
Price is proceeding lower as the pace of issuance of new retail licenses increases. There are now 50 social equity retail businesses that are fully licensed and able to operate on top of the 110 retail licenses available initially. 22 of the 50 social equity retail licenses were approved in Q3 2023 alone, nearly doubling the amount issued from November 2022 through June 2023.
With nearly 150 social equity retail businesses still holding conditional licenses and working toward achieving full licensure, price competition amongst storefronts is sure to continue to heat up. While the amount of shelf space to fill will increase, retailers will undoubtedly put pressure on wholesalers to keep prices low and preserve margins.