Friday, October 7, 2022

Washington Marijuana Sales Expected Grow To Over $2 Billion By 2020

Arcview Market Research,Ā in partnership with New Frontier Data, has released its Washington Legal Cannabis Market State Profile, which explores the recent significant changes to the stateā€™s cannabis industry.

The elimination of the medical system that was operating in parallel to the adult use market will lead to a significant contraction of the stateā€™s medical market, making the adult use market the primary driver of the official Arcview Market Research projection of $2.4 billion in cannabis sales projected by 2020.

Washington’s Marijuana Market Is Maturing

ā€œThe Washington market is maturing, but it has a long way to go to reach saturation. It will practically double by 2020. People really like cannabis and the regulated market is beating the underground market, as predicted,ā€ said Troy Dayton, CEO of The Arcview Group.

ā€œOver the past 18 months, Washington has undergone some of the most dramatic changes to any regulated cannabis program in the country, from lowering the tax rates to consolidating the medical and adult use markets into a single channel. These changes are intended to streamline the market and eliminate structural inefficiencies. However, it will be at least another year before we understand their full impact on product supply and consumer behavior,ā€ said New Frontier Data Founder & CEO, Giadha Aguirre DeCarcer.

Combining Recreational And Medical Is A Boon

Washingtonā€™s combined medical and adult use sales are projected to grow from $1.2 billion in 2016 to $2.04 billion in 2020, a compound annual growth rate of 23%. After more than two years in operation, sales in Washingtonā€™s adult use market have continued to exceed expectations. In 2014, average monthly sales were $10.8 million. By 2015 average monthly sales increased five-fold to $51.2 million. This then doubled in 2016 to more than $111.6 million, with strong demand expected to continue in 2017.

The state has folded medical sales into existing retail cannabis stores, eliminating all stand-alone medical dispensaries. Additionally, the state increased the number of retail licenses that will be made available from 334 to 556, and under the new harmonized medical program, patients will be required to pay the 37% excise tax on cannabis, thereby eliminating a key benefit of being a medical cannabis patient relative to being an adult use consumer.

Some other critical issues related to Washingtonā€™s market explored in the report include:

  • Adult Use Sales Continuing to Outperform Expectations
  • Washington exemplifies the value of making cannabis industry data publicly available
  • The growth of concentrates as the dominant non-flower product segment
  • The stateā€™s goal to expand the random testing program for pesticides

For more cannabis business coverage, visit the MJ News Network.

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