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The 2023 total cannabis sales volume in Massachusetts saw a significant increase. Yet a 40% drop in average price per gram of flower kept sales revenue flat.
The Massachusetts Cannabis Control Commission (CCC) recently issued December 2023 adult use and medical cannabis sales data, completing sales figures for last year. Total legal cannabis sales in Massachusetts in December reached $158.7 million, up 8.8% from $145.8 million in combined adult use and medical sales in November.
For 2023 as a whole, adult use and medical cannabis retailers in Massachusetts generated $1.79 billion in total sales. 2023’s combined sales figure is up slightly from under $1.76 billion in 2022. However, as we note below, with adult use retail prices down significantly in 2023, fairly flat revenue growth year-on-year obscures a significant increase in sales volume.
CCC reports the average retail price per gram of flower in the adult use market was $5.66 in December, up a bit from the all-time low of $5.61 recorded the month prior. Retail flower prices were much less volatile in 2023 relative to the year prior. (As were wholesale prices, which we discuss below.) Retail flower prices did display a modest downtrend, however, and have stayed below $6 per gram since August.
For 2023 overall, the average retail price for a gram of flower in Massachusetts’ adult use market was $6.07 per gram, down 40.5% from $10.20 in 2022. As we pointed out above, even though retail sales revenue grew by under 2% from 2022 to 2023, the dramatic price drop indicates that demand continued to expand at a healthy clip in Massachusetts’ cannabis market last year.
Our friends at Apex Trading dove into the current wholesale and retail market conditions for the Massachusetts cannabis flower market. Click here to download the report.
In our most recent discussion of wholesale flower prices in Massachusetts we noted the tight range in which rates tracked from September through the end of December 2023, maintaining a tight range of $200 per pound. We also pointed out that in the opening week of this year the state’s spot jumped up above the per pound price threshold that it last tested in August 2023.
Given price action in subsequent weeks – namely a quick drop of 11.6% per pound from the first to the third week of this year – it does not appear that the recent spike was the start of an uptrend. While price did fall through in 2023 to reaching a similar low in July and November, those declines were momentary.
However, given that January and February are historically slow sales months, combined with product from the autumn harvest likely still making its way to market, we may see that floor tested again in the coming weeks. We pointed out above that price erosion has obscured demand growth in volume terms, which could be taken as good news for the market. On the other hand, the fact that prices fell so steeply even as demand was expanding by a significant amount suggests that Massachusetts’ cannabis industry is facing a large oversupply situation that has become characteristic of mature markets, particularly those that permit outdoor cultivation.