According to a sector study by broker Canaccord, Massachusetts was the first company in the sector two years after voters approved leisure marijuana in the 2016 elections. This was five months later than originally expected.
According to industry estimates by BDS Analytics, total revenue in Massachusetts in 2018 was approximately USD 221 million, approximately 31% lower than the previous estimate of USD 377 million.
The delays in the first rollout last year were due to the lack of licensed independent testing laboratories and bureaucratic headwinds at both state and municipal levels. According to the law for recreational cannabis, host communities must sign the planned operation before a license can be issued. In addition, the municipality may levy a local tax of 3% on the gross income and negotiate a fee for the impact on the municipality of up to an additional 3% of the gross income. According to the State Cannabis Control Commission, including test laboratories, there are now 23 licensed cannabis operations in Massachusetts (in 11 companies).
While the pace of introduction remains slow and largely unpredictable, Canaccord believes that Massachusetts will quickly become one of the fastest growing cannabis markets in the world due to its attractive demographics (6.9 million people) and its position as the first large leisure market on the East Coast. The state also has a relatively large existing medical marijuana market with nearly 65,000 registered patients and probably a significant backlog given the slow pace of introduction so far. Canaccord also notes that once pharmacies are opened in Greater Boston, Massachusetts could be boosted in the next few years by tourism with visitors from neighboring states in the northeast. A study by the Colorado Tourism Office in 2016 found that 10% of this year’s visitors came exclusively for legal recreational marijuana. Overall, Canaccord continues to forecast that the Massachusetts market will grow to around USD 1.2 billion by 2022 and expects this estimate to be conservative.
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