Recreational marijuana stores reopened in Massachusetts in late May after a state-mandated, two-month shutdown in response to the coronavirus, but sales during the first week were lukewarm.
Retailers across the state generated $13.6 million for the week of May 25, up about 60% from the same week in 2019.
Pent-up demand after the reopening of stores apparently was not strong enough to sustain the precrisis sales-growth rate
Massachusetts is the only state on the East Coast with an operational adult-use industry, which means it generates a significant portion of revenue from out-of-state visitors and tourists.
But the coronavirus pandemic and resulting economic fallout have put a stop to most recreational travel, likely a key driver of why sales are softer than what would typically be expected.
Nevada and, to a lesser extent, Colorado also derive a sizable portion of adult-use cannabis sales from tourists, and neither state has fared as well through the COVID-19 crisis as markets such as Oregon and Washington state, where demand is primarily generated by local residents.
Although medical marijuana dispensaries in Massachusetts – many of which also have licenses to sell to the recreational market – were deemed essential and not forced to close, some have indicated that medical sales account for just 10%-15% of revenue.
The adult-use licensing process in Massachusetts is notoriously difficult to navigate, with only 60 retail cannabis stores currently operational throughout the state.
While two months of dramatically reduced revenue would be tough for any company to weather, the businesses that have secured the necessary approvals and permits to be up and running are in a better position than most.
Sales data shows that vape products received a boost in the first week of Massachusetts’ reopening, with the category’s share of sales rising from 14.5% during January and February to nearly 20% during the week of May 25.
Vape products’ share gain came largely at the expense of pre-rolls, which captured 6% of sales during the week of May 25, down four percentage points from the first two months of 2020.
Consumers shifting away from pre-rolls – which are often shared among multiple people – follow similar patterns observed in other adult-use markets since the coronavirus pandemic began.
Eli McVey can be reached at [email protected]
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