Maryland’s adult-use cannabis market, which launched on July 1, has been a bright spot for the legal industry, and the momentum is looking to keep rhythm for the time being.
The boon came before it even started. On June 30, the last day when only medical cannabis was legal, there was a 55.6% surge in sales compared to the previous four Fridays, according to industry data from Headset. The average Maryland medical dispensary raked in nearly $32,000 in retail sales, with a 32.7% uptick in transaction volume.
The firm said that the surge was primarily due to medical patients stocking up in anticipation of the flurry of demand from new recreational users. Other indicators, such as average transaction sizes (+17.3%), average items per transaction (+12.0%), and average item price (+4.8%) also rose during this period.
But the real boost came from the first day of adult-use sales, when retailers averaged nearly $50,000 in total sales, a staggering 252% increase over the average of the previous four Saturdays, which only had medical sales.
Transaction volume skyrocketed even higher to 275% over the same timeframe.
Another notable change came in the form of discounting. As the adult-use market opened, the average discount on cannabis products was cut in half, plummeting from about 20% in June to roughly 10% during the first 10 days of July.
Category sales also shifted with the change in the market. Pre-rolled joints, raw cannabis buds, or “flower,” and edible products gained meaningful market share, overshadowing the wellness products that were more prevalent during the medical-only days.
The transition to an adult-use market included nearly all medical cannabis dispensaries, processors, and cultivators in the state entering the recreational space, with entry fees ranging from $100,000 to $2 million.
Industry experts anticipate consistent growth trajectory, potentially catapulting Maryland’s annual adult-use cannabis revenue past the billion-dollar milestone within two years, according to a report by Massachusetts-based firm Cannabis Public Policy, which was prepared for the Maryland Department of Legislative Services.
More than half of consumers who were surveyed said they were willing to drive up to 20 minutes to purchase cannabis from a legal dispensary. The survey didn’t include residents from the neighboring states of Pennsylvania and Virginia, however.
According to a recent report from Springbig, Maryland saw a 13.1% rise in customers and a 10.2% increase in visits since last year’s second fiscal quarter.
State agency projections suggest that Maryland’s legalization of adult-use cannabis could generate about $57 million in annual tax revenue by the fiscal year 2024, and that the market size could reach $1.7 billion by 2024. A slightly more conservative estimate by MPG Consulting puts the combined size of Maryland’s legal cannabis market, including medical and recreational sales, at $1.2 billion by 2024.
Maryland hopes to follow Missouri’s example, where legalization led to a tripling in monthly cannabis sales.
The robust initial kickstart of Maryland’s adult-use cannabis market bodes well for the state industry’s future. Still, simple laws of economics will test the market as it continues to mature, as many steamy rollouts find it difficult to sustain the hype as time passes.