Marijuana Business Factbook 2019

226 Marijuana Business Factbook 2019 Chapter 5 | Financial & Operational Data: Retailers © Copyright 2020, Marijuana Business Daily , a division of Anne Holland Ventures Inc. You may NOT copy this Factbook, or make public the data and facts contained herein, in part or in whole. For more copies or editorial permissions, contact CustomerService@MJBizDaily.com or call (720) 213-5992, ext. 1. CHART 5.02: Retail Business Structure Overview By Market Source: 2019 Marijuana Business Factbook © 2019 Marijuana Business Daily, a division of Anne Holland Ventures Inc. All rights reserved. Retail Business Structure Overview By Market Recreational 9 Medical 36 Prohibit 1 Allow 8 Require 14 Allow 20 Prohibit 2 Medical And Recreational Retail Markets: Stance On Vertical Integration Number Of Medical & Recreational Retail Markets Medical Markets Recreational Markets i l ll 20 Whether retailers can operate vertically is a decision made at the state level. Although each state is different, the state-level approach to vertical integration falls into one of three broad categories: allow, require or prohibit vertical integration. In several medical markets, such as Hawaii, Maine and New York, businesses must be vertically integrated. In Washington state, however, vertical integration is not allowed, meaning cultivators and retailers must operate separate and distinct businesses. Other states, such as Maryland and Oregon, have taken a more hands-off approach, allowing vertical integration but not requiring it. In certain medical markets that mandate vertical integration ― such as Minnesota and New York ― businesses have struggled to turn a profit. Steep startup and operating costs combined with tight restrictions on the types of MMJ products allowed to be sold have put financial pressure on these capital-intensive businesses from the get-go. This appears to have gotten the attention of regulators in many new medical markets, as Arkansas, North Dakota, Ohio and Pennsylvania have not required vertical integration. Washington state is the only recreational market that prohibits vertical integration, which also extends to the state’s medical market as it has been fully integrated into the recreational system. The number of retail markets is different from the total number of markets. Vermont and Washington DC have legalized recreational use but not recreational sales, while Alaska has medical marijuana laws but does not have a medical marijuana market.