Marijuana Business Factbook 2019

296 Marijuana Business Factbook 2019 Appendix © 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. Because the landscape changes quickly and there are still many unknowns, we must make many assumptions. For instance, California began licensing businesses at the state level in 2018, but it’s clear that black and gray market operators are still a large part of the market, making it difficult to determine how that impacts everything from sales to the number of businesses in the state. States also often add new medical conditions to their programs or introduce new regulations, which can have a drastic impact on sales. And then, of course, the federal government is continually shifting its position on cannabis, which affects the size and reach of the national marijuana industry. We make assumptions on what will happen to the best of our ability using our institutional knowledge and extensive interviews with experts on the ground in each state. We also create ranges ― rather than estimate a specific sales number ― that account for best- and worst-case scenarios. Legalization can throw a huge curveball at projections. It’s difficult to predict which states will legalize recreational or medical marijuana and when ― let alone estimate how big those markets will be. For this report, we assume that four additional states will legalize recreational marijuana from 2019 to 2021 and two states will legalize medical cannabis in that time range as well. More states are projected to legalize recreational marijuana than medical marijuana in the coming years, as the number of states where MMJ has not already been legalized and have a realistic chance of passing an MMJ measure in the near future is shrinking. We then presume that: • One of these new expected recreational markets will launch in 2020, one in 2021 and two in 2022 • One of these expected new medical markets will launch at some point in 2021 and the other in 2022 For these new markets, we also assume some will be smaller and some larger, so we include a range that accounts for these differences in sizes. Any state that legalizes after 2019 likely won’t have its industry up and running by 2021 ― or at least won’t have a material impact on overall retail sales for the entire U.S. market. It usually takes two or three years for a new medical state to start sales and a year or two for new rec states to launch their programs. Dispensary/retail store openings often proceed on a rolling basis, and it could take another year or two for a market to become fully functional. Our forecasts, therefore, build in expectations for those factors. For sales estimates through 2023, we analyze each market individually and project revenues based on unique factors in each state. We also look at the expected timing of the launch of new MMJ and rec states that legalized in 2018 or earlier and are in the process of setting up their programs. You may notice in some cases our projections have changed slightly from what we published a year ago. Each year, we revisit ― and revise if necessary ― our previous and future estimates for national sales and state MMJ and recreational retail revenues. In the 2019 edition, we revised our 2018 estimates up slightly, meaning revenue came in a little bit higher than we anticipated.