Massachusetts Ripe for New Cannabis Businesses

While regulatory challenges and the slow roll-out of the Massachusetts cannabis market have proven difficult, the state's opportunities remain substantial. As state regulators aggressively pursue new ways to expand cannabis operations, Massachusetts is a fantastic state to acquire a cannabis license. The Massachusetts Cannabis Control Commission (CCC) met June 19 to weigh whether they would reduce business ownership from economically empowered applicants from 51% to 33%. They also discussed whether to expand the categories of people eligible to participate in the social equity program.

The idea is to benefit cannabis business applicants who were disproportionately impacted by the war on drugs by providing new licensing opportunities and giving those applicants priority. This reduction would allow applicants more flexibility to obtain capital. The commission has not yet finalized their decision, but they are creating a scenario that will enable more licensing, and more applicants to succeed in Massachusetts.

Overall, cannabis sales declined by 73% since March due to adult-use retail locations being deemed nonessential and closing during the COVID-19 pandemic. In March, the CCC reported that the number of active medical patients in the state went up by 63,720 people, roughly a 14% increase. According to BDSA, Massachusetts cannabis sales totaled $17.3 million in April 2020, a 21% increase compared to the following month when adult-use sales resumed. Of course, we expect sales to jump back up again with businesses open. Year-to-date sales through April exceeded $212 million, and flower sales accounted for 40% of the monthly revenue with 8.3 million. Pre-roll joints accounted for about 12% of revenue, and sales of flower in the medicinal channel increased by 22%. Concentrates were doing well and accounted for 24% of overall sales in April totaling $4.2 million, and edibles and sublinguals were up 14% in April at $2.5 million.

With sales expected to surpass $1 billion in the coming years, Massachusetts is a hotbed of opportunity for cannabis businesses.