Saturday January 5, 2019
By Erin Hiatt
In 2016, Massachusetts voters passed Question 4, the initiative to legalize the recreational use of marijuana in the Bay State for adults 21 years of age and older. But only in the past couple of months, almost two years and several delays later from the initial legalization date, are residents of Massachusetts finally able to purchase cannabis legally from state-licensed dispensaries. As Massachusetts’ legal market finally gathers some steam as predicted in 2019, more businesses are slated to open for business.
The Beginning of Legal Cannabis Sales
When the first few shops opened on November 20, 2018, customers waited in long lines to make purchases. Massachusetts Department of Revenue (DOR) Commissioner Christopher recently reported to local lawmakers that the first two weeks of adult-use cannabis sales had been very robust, bringing in more than $4.8 million at the only two shops open at the time. As of December 21, 2018, that total had reached $9.3 million.
Despite the delays in market implementation (recreational cannabis sales were expected to begin in July 2018) the DOR anticipates that legal cannabis sales could bring in between $44 to $82 million in 2019.
But, members of the Cannabis Control Commission (CCC), the organization charged with implementing and administering the Commonwealth’s cannabis laws, believes that because of the delayed opening, expected revenues may fall short by around $16 million of the DOR’s expectations. However, as more cannabis retailers continue to open their doors, the DOR predicts that revenue from marijuana could bring in $93 to $172 million in 2020, and that over the next several years that number could top $1 billion.
Massachusetts’ Legal Cannabis Market Set to Boom
The legal cannabis market in Massachusetts is finally gaining some traction with the addition of two more retailers now open for business and nearly two dozen applicants waiting to receive their licenses so they can begin sales. Retail licenses are only part of the puzzle, as complementary enterprises like testing labs, cultivators, and manufacturers are also waiting for the go ahead from state officials, which could further streamline cannabis operations.
Cultivate and NETA (New England Treatment Access), the first two dispensaries to open, had planned for more than two years to avoid the cannabis shortages that hit Canada hard when legal cannabis sales began in October, 2018. Though there were no plans at Cultivate to cap the state’s legal limit on cannabis purchases, the new retailer, which also acts as a medical marijuana dispensary, is keeping their fingers crossed that enough product had been amassed to meet demand.
At NETA, Director of Government Affairs Norton Arbelaez told the Boston Business Journal that they had been working for two years and had invested millions to expand cultivation, hire more employees, and update technology. NETA’s plan to manage demand, if needed, is to limit how much each consumer can buy.
Improving Over Time
As with any emerging industry, Massachusetts’ cannabis industry is now on a path that will change and adapt over time. One issue that regulators are likely to tackle next year is social use, where consumers could purchase cannabis and consume it in bar or club, or bring their own cannabis to consume. But, after strong pushback from legislators and Republican Governor Charlie Baker, the entire issue of social use has been shelved for the time being.
Aspects of the cannabis law that the CCC continues to have difficulty implementing are provisions within Question 4 intended to help those most affected by the War on Drugs. This includes prioritizing people of color for cannabis business applications, but so far, no one has fit the bill, according to Cannabis Control Commissioner Shaleen Title.
As regulators continue to iron out the regulatory and implementation wrinkles, Bay State cannabis consumers aged 21 years and older can purchase flower, concentrates, distillates, vapes and edibles from four retailers, with more openings clearly on the horizon.
What are your thoughts on Massachusetts’ fledgling cannabis market? Share them in the comments below!