420 with CNW – Massachusetts Consumers Buy Legal Marijuana Worth $393 Million in First Year

It has been a year since Massachusetts started selling recreational marijuana, and although the state was not in a hurry to speed up the matter, the public was interested as they rushed to the retail stores immediately after the sale began.

It took long to legalize adult-use marijuana in the state, but in November of 2016, the citizens legalized recreational cannabis through the ballot. In 2017, Massachusetts governor, Charlie Baker, signed legislation that changed the rules governing weed, pushing the sales of recreational marijuana back by six months. After overcoming several other hiccups, the Cannabis Control Commission (CCC) passed the most significant regulations in March of 2018. The state only had four retail outlets licensed to sell marijuana by October 2018, and only two were operable during the launch of marijuana sales.

In 2017, the Department of Revenue in Massachusetts estimated that for the 2019 fiscal year, the state would be able to collect marijuana tax revenue ranging between $44 million and $82 million. The DOR made the estimates hoping the state would be having a reasonable number of retail marijuana outlets, which didn’t happen on the first day of legal sales.

However, the program started well since, in the first five days of the sale, customers spent $2.2 million, and on the first day alone, the retail outlets sold 56,380 units at an average price of $39.33 per item. The total sales for that day amounted to $440,000.

In 2019, the state of Massachusetts has reported gross marijuana sales of $393.7 million from the records of 33 licensed retail outlets. Although the demand for adult-use marijuana is high, the supply is low because the number of licensed cultivators in Massachusetts is not enough to service all the dispensaries. The licensing process for cultivation licenses is slow, and there are only two testing facilities in the state, causing additional problems for the dispensaries.

The CEO of AmeriCann, Tim Keogh, said that the company recognized Massachusett’s potential in becoming one of the top players in the marijuana market several years back. Keogh further noted that his company expects a significant contribution to the marijuana industry. He also said that they have completed the construction of the Cannabis Center Development, which is a cultivation and processing facility standing on a 30,000-square foot plot. The facility will be wholly occupied by Bask, Inc., which an existing vertically integrated marijuana operator in the state.

The CCC chairman Steve J. Hoffman commended retailers and consumers of marijuana for participating in the launch of adult-use legal sales in the state. He further said that he was proud of the marijuana businesses for working together with the commission to obtain and maintain compliance with the state’s regulations. The state is in the process of approving an additional 54 retail licenses once the commission is through with inspection and compliance protocols.

The senior analyst in Canaccord Genuity, Bobby Burleson, said that the rollout was slower than was expected. He further said that the state is planning on approving more operator licenses and additional dispensaries in Brookline and Newton. By the end of 2019, the sales are expected to increase to $600 million, and by 2020, the DOR estimates that the sales would be more than $1.2 billion. The state is yet to report the amount of revenue generated in the first year of recreational marijuana sales.

Analysts are of the view that industry players like MCTC Holdings Inc. (OTC: MCTC) and Sproutly Canada Inc. (CSE: SPR) (OTCQB: SRUTF) (FRA: 38G) who see these sales statistics will view them as highly encouraging for the sector given the stuttering start to the adult-use market.

About CNW420

CNW420 spotlights the latest developments in the rapidly evolving cannabis industry through the release of two informative articles each business day. Our concise, informative content serves as a gateway for investors interested in the legalized cannabis sector and provides updates on how regulatory developments may impact financial markets. Articles are released each business day at 4:20 a.m. and 4:20 p.m. Eastern – our tribute to the time synonymous with cannabis culture. If marijuana and the burgeoning industry surrounding it are on your radar, CNW420 is for you! Check back daily to stay up-to-date on the latest milestones in the fast -changing world of cannabis.

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