Marijuana Business Factbook 2019

231 © 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. Financial & Operational Data: Retailers | Chapter 5 MJBIZDAILY.COM Unlike wholesale cultivators, vertically integrated retailers have a guaranteed outlet for the cannabis they grow. And unlike stand-alone retailers, they have cultivation facilities at their disposal and can be more responsive to shifting consumer demand. If the business observes a spike in consumer demand for a particular strain, terpene profile or potency level, this information can be communicated to the cultivation team and production shifted to meet the increased demand. Revenue for vertically integrated retailers in medical markets is higher than in recreational markets, driven in part by license caps that allow a small number of businesses to dominate the market. Well-capitalized companies that are able to secure licenses in these states can be rewarded with significant opportunity for growth as patient counts and sales continue to increase. Revenue for stand-alone retailers in recreational markets is outpacing revenue for stand-alone retailers in medical markets, bolstered by consumer demand and benefiting from the competition that has driven down wholesale cannabis prices in these markets. Opportunities for stand-alone medical marijuana retailers have increased in recent years as new markets, including Arkansas, Maryland, Ohio and Pennsylvania, do not require retailers to be vertically integrated. In states that have gone on to legalize recreational use ― Nevada and Oregon, in particular ― stand-alone medical retailers have been negatively impacted by customer loss as patients forgo their medical registrations and the intensely competitive environment that crops up after legalization.