Marijuana Business Factbook 2019

23 © 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. State-By-State: Legal Overview, Market Data and Outlook The cannabis industry is unique compared to other industries in the United States in that each state creates its own rules and regulations, contributing to the fragmentation of the industry. In addition to differences at the state level, cities and municipalities have also been allowed to develop their own rules regarding cannabis, meaning the operational environment can vary widely between and within states. Examples of varying rules and regulations include: • Some states require vertical integration ― meaning operators in these states are responsible for all aspects of their marijuana supply chain, from cultivation to processing to retail sales. In other states, vertical integration is strictly prohibited, and then some take no stance on whether it is prohibited or required. • In most states, dispensaries are allowed to operate on a for-profit basis, but in others they must be not-for-profit entities. • Many states have set an upper limit on the number of marijuana business that are allowed to operate. Others hope the absence of license caps will create a competitive environment that encourages investment and forces legal prices down to compete with the illicit market. Missouri is unique in that it places a floor on the number of business licenses that will be issued ― tying this minimum figure to the state’s population. • Product availability varies from state to state, with some states prohibiting dry flower ― still the most popular cannabis derivation overall ― and others banning infused edibles altogether or in certain forms. • The cost to obtain and renew a business license varies not only from state to state, but between business types as well. Some states renew licenses on an annual basis while others are biannual, some require proof of working capital while others do not. Often the cost of a cultivation license will differ from a retail or dispensary license, which may also differ from the cost to license a processor or testing lab. States also differ in the type and frequency of data they release to the public. Some states provide robust data related to patient counts, sales, transactions, tax information and products sold and update this data throughout the year. Other states will provide one report each year, and others issue no data at all. The absence of market data makes it difficult to estimate the size and health of a state’s market and to fully understand the business opportunities therein. This chapter seeks to address these issues by presenting a comprehensive state-by-state overview of marijuana laws, estimates of patient and customer counts, sales and pricing estimates and market analysis. Chapter 2