Despite the headaches that many in the cannabis industry have endured, wholesale platform company LeafLink mined its data to determine that by 2030, the U.S. cannabis market is projected to reach around $55 billion. That would put the growth at an annual rate of 11%. The company released a new report titled, “Insights into The State of the U.S. Cannabis Industry Fall 2024” using data sourced from state-level sales reports from August 2024-October 2024. LeafLink used internal data and extensive analysis of over 332,000 on-platform SKUs and more than 1 million annual orders.

Record sales

Sales continue to hit records with an annual run rate for 2024 expected at $33 billion, which is up 7% year over year. “We expect much of the sales growth in 2024 and 2025 to come from new licenses issued in key states, expanding retail capacity in New York, New Jersey, Maryland, Ohio, Illinois, and Minnesota,” stated the report. “Over the long term, additional growth will likely come from major population centers that have yet to implement fully legalized or structured markets.”

In just 10 years, the industry has quickly evolved from a single state to now 41 states supporting over half a million jobs. LeafLink zeroed in on emerging states like New York, New Jersey, Maryland and Ohio for substantial near-term growth. The report said that an estimated 5,000 new non-MSO retailers are projected to open in states like New York, New Jersey, Maryland, and Minnesota over the next 24-36 months, representing a 70% increase in store count (excluding Oklahoma). These new store openings are driving sales, while steady growth in states like Illinois and Missouri balances declines in California, Arizona, and Oklahoma.

Dispensary success

With so many cannabis companies going into receivership and several selling their businesses, it might be hard to believe such rosy numbers and outlooks. LeafLink dug into sales per resident and retail sales per dispensary to gain insights as to where the bright spots are in the market. The report found that the national average sales per resident stands at $97, however, states with established legal markets tend to have higher sales per resident, while states with newer or developing markets show lower figures.

When looking at success at a dispensary level, there were factors that affected each state. Some states with limited licenses or steady tourism helped drive higher sales per retail license. The report also found states with strong market balance and stability, along with moderate license counts that aligned well with demand, created steady revenue for operators and minimized supply issues.

States that were top performers for dispensaries included Maryland, Nevada and Illinois. States featuring balanced markets included Arizona and Pennsylvania. Arkansas and Missouri were classified as emerging hotspots. State with room to grow included Oklahoma, New York and New Mexico. It should be noted that Oklahoma has the lowest sales per license at $0.4 million due to a high number of licenses (1,844), causing an oversaturated market.LeaflInk felt there may be an opportunity for consolidation or increased operational efficiency to enhance per-store profitability.

Flower power

As usual, flower remains the top-selling category and prices continue to decline. The report found that the average flower price dropped to $1,065 per pound in October, down about $100 from peak summer levels. “This decrease aligns with seasonal outdoor harvests, which typically leads to oversupply and lower prices in key markets like Michigan and Arizona,” said the report.

Dropping prices isn’t great for the sellers, however, the buyers had been able to capitalize on the lower prices. Buyers have been able to negotiate for better prices amongst suppliers. The report though did point out that lower prices can result from increased supply in some state and also reduced demand from consumers.

D.C. radar

The industry is also keeping a close eye on legislators in Washington D.C. LeafLink believes that the reclassification of cannabis to Schedule III could relieve the 280E tax burden and potentially increase industry cash flow by $2-3 billion annually.

 



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