Marijuana Business Factbook 2019

246 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 5.18: Number Of Retail Store Locations & Square Feet Of Retail Space Per Store For Dispensaries & Rec Shops Source: 2019 Marijuana Business Factbook © 2019 Marijuana Business Daily, a division of Anne Holland Ventures Inc. All rights reserved. Number Of Retail Store Locations & Square Feet Of Retail Space Per Store For Dispensaries & Rec Shops 1.3 2.1 2.2 2.5 2,328 2,183 Stand-Alone Retailers Vertically Integrated Retailers Average Dispensary & Rec Store Square Footage Per Store Average Number Of Retail Store Locations By Market & Business Type Medical Market Recreational Market , Retail businesses in recreational markets tend to operate more storefronts than those in medical markets. There are several reasons for this, including no or very high licensing caps in recreational markets ― meaning there is less competition for licenses ― and these markets often have lower licensing fees, making the entire operation less expensive to get off the ground than in medical markets. Once a retailer has established one storefront, it is easier to develop another. Stand-alone retailers typically operate fewer storefronts than vertically integrated retailers. Because they are growing and manufacturing their own products, vertically integrated retailers net higher margins on what they sell than do stand-alone retailers, who are at the mercy of wholesale pricing trends and availability ― which may or may not align with current consumer demand. Higher margins allow vertically integrated retailers to withstand pricing competition and other external shocks to a greater degree than stand-alone retailers. Average square footage of stores is similar between recreational and medical markets, with recreational stores trending slightly larger by an average of 145 square feet. Small formats work and are preferred in most markets. In urban areas, real estate costs and competition for real estate in cannabis-zoned areas may be such that only a small space is affordable. But smaller isn’t always the model to follow. Some medical retailers will want extra space for private patient consultations or an open area to host educational events, while recreational stores have found success with large stores that offer a broad assortment of products.