Marijuana Business Factbook 2019

233 © 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 On the other hand, vertically integrated retailers in medical markets also have the highest proportion of businesses that are profitable. If a company can secure a license in a vertically integrated state with limited license availability, they have the potential to dominate the market. This has played out in a number of states, including Arizona, Florida, Massachusetts, New Mexico and Rhode Island. As evidenced by the financial figures presented in the previous chart, most stand-alone retailers in medical marijuana markets are breaking even, with revenues and costs roughly equal. In medical markets that have gone on to legalize recreational use, stand-alone retailers have been negatively affected by some patients forgoing their medical registration in favor of purchasing through recreational retailers. Stand-alone retailers may also be impacted by competition from well- capitalized recreational retailers ― some of which are multistate operators with extensive finances and business reach. Low startup costs and rapidly growing markets have allowed many stand-alone retailers in recreational markets to operate profitably, with this category reporting a greater proportion of businesses turning a profit than vertically integrated retailers in recreational markets. The trend in consumer preferences away from flower toward concentrates, vape pens and edibles has taken away some of the advantages of vertically integrated retailers in these markets by introducing the need for processing capacity, which some vertically integrated retailers may lack. The primary advantage of vertical integration is a retailers’ ability to control its supply chain.