Cannabis is a massive new engine in the American economy and there is a tidal wave of demand for cannabis products.
As states report cannabis sales numbers for 2020, record highs continue across the country. It’s become a billion-dollar business for several states, blowing out levels that states had estimated when originally planning legalization.
Billion Dollar Club
The Colorado Department of Revenue reported that cannabis sales in the state passed $2 billion in sales from January – November 2020. Plus, December hasn’t even been added to the total sales figures. Despite the pandemic, the state has continued to break records. Steve Lopez, CEO, The Green Solution (Colorado) said, “With over $2 billion in sales from January through November 2020, we’re continuing to see Colorado break sales records through the pandemic. We debuted over 50 self-serve kiosks at our 21 retail locations across the state last year, and credit high sales to the innovation and creativity in our industry, as well as the measures we’ve implemented to prioritize staff and customer safety.”
Adult-use cannabis retailers in Massachusetts have now tallied more than $1 billion in gross sales, according to information reported in the state’s mandatory seed-to-sale tracking system, the Cannabis Control Commission. At the close of business on October 30, the aggregate data reported in Metrc by 80 retailers reached $1,000,521,905. What makes this even more impressive is that the state program is basically only two years old.
“This sales milestone represents licensees’ ability to successfully support a safe, accessible, and effective adult-use industry, and I am pleased the resulting tax benefits will have a significant impact on communities throughout the Commonwealth,” Commission Chairman Steven J. Hoffman said. “These numbers also speak to Commission licensing and enforcement staff working around the clock to make sure these businesses and their products comply with all of our regulations, especially the health and safety provisions. Each year, as this marketplace matures, the public will continue to see progress on state mandates and Commission objectives, including our commitment to equity, and the steps we have taken in 2020 are evidence of that.”
The California Department of Tax and Fee Administration has shown that the state is on track to bring in a billion dollars in cannabis tax revenue in 2020. So far, a total of $778.4 million was generated from marijuana taxes in the first three quarters of the year, including $306.8 million in the third quarter. As of August 11, 2020, California’s cannabis excise tax generated $101.8 million in revenue reported on the 2nd Quarter 2020 returns due by July 31, 2020, and the cultivation tax generated $22.9 million. Since January 2018, total program revenue to date is $1.45 billion, which includes $709.9 million in cannabis excise tax, $173.7 million in cultivation tax, and $563.6 million in sales tax.
The Oregon Liquor Control Commission (OLCC) recently released data noting that total cannabis sales in the state increased from $795 million in 2019 to $1,110,520,723 in 2020, a new record-breaking year for the state. Jeff Yapp, CEO, Golden Leaf Holdings, which operates Chalice Farms dispensaries (Oregon) said:
“2020 was a tough year for many small business owners, however, it was a record-breaking year for cannabis and Golden Leaf Holdings through Chalice Farms as more people turned to cannabis as an alternative form of health and wellness. With so many states deeming cannabis essential businesses, it began to change the conversation in a positive direction in the industry. Our customers dealing with the stress, anxiety, and pain caused by the many challenges of COVID-19 and the impacts it is having on their lives, are seeing positive results from the responsible use of cannabis products.”
Washington State is another one of the more mature states for cannabis sales. Its adult-use cannabis market generated $1.1 billion in fiscal 2019 – up 8% over 2018. The state’s fiscal year 2019 is from July 1, 2019, through June 30, 2020.
Almost Billion Club
One of the cities impacted most dramatically over the past year is Las Vegas, which is incredibly reliant on tourism and hospitality. While Nevada’s cannabis industry continues to see increases in sales, the market has consistently brought in much-needed tax revenue to the state and has maintained jobs for more than 8,000 workers. The state’s fiscal year 2020 delivered $684 million in taxable cannabis sales. Three months into the fiscal year 2021, the state has reported sales of $234 million. This compares to $178 million for the same period in the previous fiscal year.
Matt Janz, director of THC marketing, The Source+ (Nevada) said, “We’ve seen our industry grow from illegal to essential. Nevada not only saw an increase in overall cannabis sales in 2020 but maintained much-needed jobs for thousands of people across a state almost entirely reliant on hospitality and tourism. We’re looking forward to continuing to provide wellness in our state as an essential business and provide substantial tax revenue to Nevada in these challenging times.”
Michigan reported that in 2020 combined cannabis sales were $984.6 million, with adult-use leading the way with sales of $510.7 million, while medical sales contributed $474 million.
The adult-use market noted that flower and trim were most desirable and took 55% of the market. Concentrates and vape accounted for 25%, with edibles falling in fourth place at 19% of the market. The decline in the price of flower was welcome with prices beginning the year at over $8000 a pound in January but ended in December at $5614 per pound.
Another relative newcomer is Illinois. That state reported that its 2020 adult-use and medical cannabis sales were reported to be $669 million. A spokesperson from Green Thumb Industries said, “Another record-breaking month of adult-use cannabis sales in Illinois is not surprising. Cannabis is a massive new engine in the American economy and there is a tidal wave of demand for cannabis products. There is mass acceptance of the U.S. cannabis industry by consumers. There are very few issues that have that kind of universal acceptance. We look forward to welcoming a new generation of entrepreneurs when the social equity licenses are awarded.”