Massachusetts MMJ Market Estimates: $5M-$80M

How big will the Massachusetts medical marijuana market be once dispensaries open? It’s a hotly debated question in the MMJ industry.

Estimates are all over the board, with some experts predicting annual sales of just $5 million and others projecting revenue of nearly $80 million.

That’s an unusually large gap in estimates for a new market, highlighting differing expectations for Massachusetts’ medical marijuana industry and making it difficult for entrepreneurs to make financial projections.

Marijuana Business Daily projects that revenues will be in the middle of the range at the start, with initial annual sales of around $40 million based on several factors including average patient spend and dispensary revenues in similar markets.

The $5 million estimate is simply way too small.

With up to 35 dispensaries allowed in Massachusetts, that would equate to average revenues of $143,000 per center when all are open. That’s an absurdly low number in even the smallest medical cannabis markets. If that’s the case, most dispensaries would not be able to stay in business. Even if only some dispensaries actually open in the first year, they will likely generate way more than $5 million in collective sales given potential demand.

On the other hand, estimates at the top of the range appear way too high, at least initially. Sales of $80 million annually would mean each dispensary is pulling in an average of more than $2 million in revenues – much higher than the national average.

It’s not out of the question, but it will likely take time to ramp up to those numbers.

And few dispensary applicants are planning on such strong sales right off the bat.

Andrew DeAngelo, who helps run Harborside Health Center in California and has applied for a dispensary license in Boston, told the Cape Code Times that his business plan calls for 50 patients a day at the start. He estimates that patients will spend about $90 per visit, for a total haul of $4,500 per day.

That would put revenues at between $1 million and $1.6 million depending on how many days a week the dispensary is open. He expects the patient base to grow by 50% the first year, 25% the second year and 10% the third year. Under that plan, the dispensary wouldn’t top $2 million in sales until the second year at the earliest.

Of course, much will depend on how many patients sign up for the program. The state’s official estimate is 2% of the population, or around 127,000 patients.

That’s a wildly optimistic, best-case scenario, at least when looking at other MMJ markets.

More likely, the patient base will be in the tens of thousands to start the first year and will grow over time.

4 comments on “Massachusetts MMJ Market Estimates: $5M-$80M
  1. MMJ on

    “tens of thousands to start the first year and will grow over time”. Really? Tens of thousands? Why does no analysis mention the condition list of MA? A market with “other” is more open than most markets. Also comparing MA potential dispensary revenue to local markets the are heavily care-giver based like RI and Maine makes no sense at all. I am glad you raised your early projection of $10-20 million even though it was based on the same math as your $40 million…

    Reply
    • chrisw on

      This is exactly why the range in estimates – $5 million to $80 million – is so wide: Everyone has a different view of how the market will develop in the first year. Sounds like you are more optimistic than us and others. While we have no doubt the patient count could eventually top 100,000, it would be a record if MA does it in the first year. Hence the projection of tens of thousands of patients initially. Additionally, not all 35 dispensaries will open immediately, so it will take time for the industry to hit its stride.

      Hope you’re right though!

      Reply
  2. Fernando on

    I work for a large multi office MJ doc clinic in MA and we have already done aprox 5,000 patients in the 11.5 and there are no dispensarys open yet. That should give you something to think about!

    Reply

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