Factbook 2016 Table of Contents

Factbook 2016 – Table of Contents

  • Introduction xi
  • From the Editor xi
  • Introduction xiii
  • 5 Key Takeaways xiv
  • Who’s Behind This Factbook? xvii
  • Executive Summary: 12 Key Charts xviii
  • Chapter 1: National Cannabis lndustry Facts, Figures & Trends 1
  • Chart 1.01: U.S. Cannabis Sales Estimates: 2013-2020 2
  • Chart 1.02: U.S. Cannabis Industry Total Economic Impact: 2013-2020 4
  • Chart 1.03: Cannabis Annual Sales Vs Other U.S. Industries & Goods 5
  • International Markets 6
  • Chart 1.04: Estimated Number Of Cannabis Businesses In The U.S.: 2016 7
  • Chart 1.05: Estimated Total Employment In The Cannabis Industry: 2016 7
  • Chart 1.06: When Cannabis Businesses Were Founded 8
  • Chart 1.07: Portion Of Female Executives In The Cannabis Industry 8
  • Chart 1.08: Which States Have Open Medical Dispensaries And Recreational Stores? 9
  • Chart 1.09: Time Between Legalization/Regulation Of Medical Cannabis Sales To Opening Of First Dispensary: States That Came Online Since Jan. 1, 2015 10
  • Chart 1.10: Time Between Recreational Cannabis Legalization & First Store Opening 11
  • Chart 1.11: Nationwide MMJ Patient Counts: 2013-2016 12
  • Chart 1.12: Portion Of Cannabis Companies That Operate On A Not-For-Profit Basis 13
  • Chart 1.13: Portion Of Cannabis Businesses That Operate In More Than One U.S. State    14
  • CBD-Only States 15
  • CANNABIS INDUSTRY SECTORS: KEY METRICS 16
  • Chart 1.14: Typical Cannabis Company Startup Costs & Annual Operating Expenses By Sector 16
  • Chart 1.15: Cannabis Company Typical Net Profit Margin & Annual Revenue By Sector 17
  • Chart 1.16: Typical Number Of Full- And Part-Time Employees Per Cannabis Business, By Sector 17
  • Chart 1.17: Typical Cannabis Company Annual Revenue Per Full-Time Employee 18
  • Chart 1.18: Average Annual Revenue Per Square Foot: Cannabis Vs Other Retailers 18
  • Chart 1.19: Length Of Time To Break-Even/Profitability: Cannabis Companies 19
  • Chart 1.20: Portion Of Revenue-Generating Cannabis Businesses That Are Profitable       20
  • Market In Focus: Washington State Point-of-Sale Data 21
  • Chart 1.21: Quarterly Retail Cannabis Sales & Growth Rates: Washington State 21
  • Chart 1.22: Washington State Monthly Total Retail Cannabis Sales Vs Average Price Per Gram 22
  • Chart 1.23: Composition Of Quarterly Retail Cannabis Sales By Product Category: Washington State 23
  • Chart 1.24: Cannabis Sales Growth Rates By Product Category From Q3 2014 To Q3 2015: Washington State 24
  • THE BANKING CHALLENGE 25
  • Chart 1.25: Cannabis Companies’ Access To Bank Accounts 25
  • Chart 1.26: Marijuana Suspicious Activity Reports Filed By Financial Institutions: February 2014-January 2015 26
  • Marijuana As A Commodity: National Wholesale Pricing Insights 27
  • Chart 1.27: Current Average Wholesale Cannabis Prices By State 27
  • Chart 1.28: Weekly Wholesale Cannabis US Spot Index: April 2015-January 2016 28
  • Chart 1.29: Current Average Wholesale Cannabis Prices By State & Cultivation Method    29
  • Chart 1.30: Medical Vs Recreational Average Wholesale Cannabis Price: Colorado, Washington State & Oregon 30
  • Chart 1.31: Range Of Wholesale Cannabis Prices By State: August 2015 Through January 2016 31
  • DOMESTIC CANNABIS INDUSTRY OUTLOOK 32
  • Chart 1.32: Top Challenges For Cannabis Businesses 32
  • Chart 1.33: Cannabis Entrepreneurs’ Outlook For The Next 12 Months By Sector 33
  • Chart 1.34: Retailers, Infused Product Makers & Wholesale Cultivators That Predict A “Booming” Business For The Next 12 Months: 2014-2016 34
  • Regulatory Compliance At A Glance: Top Issues & Infractions 35
  • Chart 1.35: Top 7 Regulatory Compliance Infraction Types In Colorado: CO Medical & Recreational Businesses 35
  • Chart 1.36: Fastest Growing Areas Of Regulatory Noncompliance In Colorado: All Medical & Recreational Businesses 36
  • Chart 1.37: Most Common Regulatory Compliance Infraction Types From July 2015-December 2015: CO Medical & Recreational Retailers 36
  • Chart 1.38: Most Common Regulatory Compliance Infraction Types From July 2015-December 2015: CO Medical & Recreational Cultivators 37
  • Chart 1.39: Most Common Regulatory Compliance Infraction Types From July 2015-December 2015: CO Medical & Recreational Infused Product Makers 37
  • Chart 1.40: Change In Most Common Infraction Types Over Time: CO Medical & Recreational Retailers 38
  • Chart 1.41: Change In Most Common Infraction Types Over Time: CO Medical & Recreational Cultivators 39
  • Chart 1.42: Change In Most Common Infraction Types Over Time: CO Medical & Recreational Infused Product Makers 40
  • Chart 1.43: Average Regulatory Compliance Audit Scores In 2015: CO Medical & Recreational Retailers 41
  • Chart 1.44: Average Regulatory Compliance Audit Scores In 2015: CO Medical & Recreational Cultivators 42
  • Chart 1.45: Average Regulatory Compliance Audit Scores In 2015: CO Medical & Recreational Infused Product Makers 42
  • Chapter 2: State-By-State: Legal Overview, Market 45
  • Data and Outlook 45
  • Table 2.1: State Stability and Opportunity Rankings 47
  • Map 2.1: US Marijuana Laws and Dispensary 48
  • Numbers 50
  • ALASKA – Medical Marijuana 50
  • ALASKA – Recreational 51
  • ARlZONA – Medical Marijuana 53
  • CALlFORNlA – Medical Marijuana 55
  • COLORADO – Medical Marijuana 57
  • COLORADO – Recreational 59
  • CONNECTlCUT – Medical Marijuana 61
  • DELAWARE – Medical Marijuana 63
  • HAWAll – Medical Marijuana 65
  • lLLlNOlS – Medical Marijuana 67
  • MAlNE – Medical Marijuana 69
  • MARYLAND – Medical Marijuana 71
  • MASSACHUSETTS – Medical Marijuana 73
  • MlCHlGAN – Medical Marijuana 75
  • MlNNESOTA – Medical Marijuana 77
  • MONTANA – Medical Marijuana 79
  • NEVADA – Medical Marijuana 81
  • NEW HAMPSHlRE – Medical Marijuana 83
  • NEW JERSEY – Medical Marijuana 85
  • NEW MEXlCO – Medical Marijuana 87
  • NEW YORK – Medical Marijuana 89
  • OREGON – Medical Marijuana 91
  • OREGON – Recreational 93
  • RHODE lSLAND – Medical Marijuana 95
  • VERMONT – Medical Marijuana 97
  • WASHlNGTON DC – Medical Marijuana 99
  • WASHlNGTON DC – Recreational 100
  • WASHlNGTON STATE – Medical Marijuana 101
  • WASHlNGTON STATE – Recreational 103
  • CANADA – Medical Marijuana 105
  • Chapter 3: Financial & Operational Data: Medical Dispensaries, Recreational Stores & Wholesale Cultivators 107
  • RETAILERS: MEDICAL DISPENSARIES & RECREATIONAL STORES 107
  • Retailer Startup Costs & Operations 108
  • Chart 3.01: Sampling Of Retail Startup Costs 108
  • Chart 3.02: Sampling Of Retail Startup Costs By State 109
  • Chart 3.03: Retail Businesses By Year Launched 110
  • Chart 3.04: Typical Retailer Startup Costs For Businesses Launched In The Past Two Years 112
  • Chart 3.05: Breakdown Of Startup Costs For Medical & Recreational Retailers 113
  • Chart 3.06: What Portion Of Recreational Shops Were Built Off Existing MMJ Dispensaries? 114
  • Chart 3.07: Recreational Shops Built Off Existing MMJ Dispensaries: What Portion Are Co-Located? 115
  • Chart 3.08: What Portion Of Retail Businesses Are Generating Revenue? 115
  • Retailer Product Mix 116
  • Chart 3.09 (3.11): Retail Revenues By Product Type 116
  • Retailer Revenue Figures 117
  • Chart 3.17: Typical Annual Revenue Per Retail Location 117
  • Market In Focus: Washington State Point-of-Sale Data 118
  • Chart 3.10: Change In Flower Dollar Sales Versus Average Price Per Gram In Washington State: 2014-2015 118
  • Chart 3.11: Flower Sales By Genus In Washington State: Q3 2015 118
  • Chart 3.12: Total Sales Of Top 10 Cannabis Strains In Washington State: Q3 2014 Through Q3 2015 120
  • Chart 3.13: Change In Concentrate Dollar Sales Versus Average Price Per Gram In Washington State: 2014-2015 120
  • Chart 3.14: Concentrate Sales By Sub-Category In Washington State: Q3 2015 121
  • Chart 3.15: Change In Edible Dollar Sales Versus Average Price Per Unit In Washington State: 2014-2015 122
  • Chart 3.16: Edible Sales By Sub-Category In Washington State: Q3 2015 123
  • More Retailer Revenue Figures 124
  • Chart 3.18: Typical Annual Revenue Per Retail Location: Purchase Wholesale Vs Grow In-House 124
  • Chart 3.19: Sampling Of MMJ Dispensary Annual Revenue Per Location By State 125
  • Chart 3.20: Sampling Of Recreational Store Annual Revenue Per Location By State 125
  • Retailer Operational Data 126
  • Chart 3.21: Allocation Of Monthly Operating Expenses For Medical & Recreational Retailers 126
  • Chart 3.22: Marketing, Advertising & PR As Percent Of Retailers’ Monthly Budget 127
  • Chart 3.23: Number Of Store Locations: Dispensary Vs Recreational Store 128
  • Chart 3.24: Retail Square Footage: Dispensary Vs Recreational Store 129
  • Chart 3.25: Typical Retailer Annual Revenue Per Retail Square Foot 130
  • Chart 3.26: Number Of Employees: Dispensaries & Recreational Stores 131
  • Chart 3.27: Customers Served Per Retail Location Per Day: Dispensary Vs Recreational Store 132
  • Chart 3.28: Transaction Amount Per Patient/Customer 132
  • Chart 3.29: Portion Of Retail Marijuana Businesses That Are Profitable 133
  • Chart 3.30: How Long Does It Take Retailers To Hit Profitability? 134
  • Chart 3.31: Sampling Of Average Profit Margin By Type Of Dispensary/Store 135
  • Chart 3.32: Markup Between Wholesale Cost & Price To Patient/Customer 136
  • Chart 3.33: Total Cultivation Square Footage: Retailers That Exclusively Or Partially Grow In-House 137
  • Chart 3.34: Number Of Strains Grown: Retailers That Exclusively Or Partially Grow In-House 138
  • Chart 3.35: Portion Of Cannabis Cultivated Organically: Retailers That Exclusively Or Partially Grow In-House 139
  • Chart 3.36: Retailer Year-Over-Year Profitability 140
  • WHOLESALE CULTIVATORS 140
  • Chart 3.37: Which Markets Do Wholesale Cultivators Serve? 141
  • Wholesale Cultivation Startup Costs 141
  • Chart 3.38: Typical Wholesale Cultivator Startup Costs Per Square Foot By Cultivation Type: 2014-2015 142
  • Chart 3.39: Typical Wholesale Cultivator Startup Costs Per Square Foot Based On The Market Served 143
  • Chart 3.40: Breakdown Of Wholesale Cultivator Startup Costs By Cultivation Type 144
  • Cultivation Methods & Technology 145
  • Chart 3.41: Where Do Wholesale Cultivators Grow Cannabis: Indoor, Outdoor, Greenhouse? 145
  • Chart 3.42: Combo Method Cultivators: What Portion Is Grown Indoors? 146
  • Chart 3.43: Combo Method Cultivators: What Portion Is Grown Outdoors? 147
  • Chart 3.44: Combo Method Cultivators: What Portion Is Grown In Greenhouses? 148
  • Chart 3.45: Which Lighting Technologies Do Indoor Wholesale Cultivators Use? 148
  • Wholesale Cultivator Revenue & Operations 149
  • Chart 3.46: What Portion Of Wholesale Cultivators Are Generating Revenue? 149
  • Chart 3.47: Typical Total Annual Revenue By Cultivation Method: Wholesale Cultivators 150
  • Chart 3.48: Wholesale Cultivator Typical Annual Revenue Per Square Foot By Cultivation Method 150
  • Chart 3.49: Allocation Of Monthly Operating Costs For Wholesale Cultivators By Cultivation Type 151
  • Chart 3.50: What Portion Of Wholesale Cultivators Lease Their Commercial Space? 152
  • Chart 3.51: Wholesale Cultivator Typical Monthly Operating Expenses Per Square Foot 152
  • Chart 3.52: Size Of Wholesale Cultivator Grow Space 153
  • Chart 3.53: Snapshot Of How Wholesale Cultivation Costs Relate To Cultivation Type & Size 154
  • Chart 3.54: Wholesale Cultivator Full- & Part-Time Staff Size 155
  • Chart 3.55: Typical Number Of Employees By Size Of Grow Space: Wholesale Cultivators 156
  • Chart 3.56: Average Number Of Strains Grown By Cultivation Method: Wholesale Cultivators 156
  • Chart 3.57: Portion Of Wholesale Cannabis Grown Organically: Wholesale Cultivators     157
  • Wholesale Cultivator Profitability 158
  • Chart 3.58: Portion Of Wholesale Cultivators That Are Profitable 158
  • Chart 3.59: Profitable Wholesale Cultivators: Net Profit Margin 159
  • Chart 3.60: How Long Does It Take Wholesale Cultivators To Hit Profitability, By Cultivation Type? 160
  • Chart 3.61: Wholesale Grower Profitability: 2013-2015 161
  • Chapter 4: Infused Product Makers, Testing Labs & Ancillary Firms 163
  • INFUSED PRODUCT MANUFACTURERS 164
  • Chart 4.01: Which Markets Do Infused Product Manufacturers Serve? 164
  • Infused Product Manufacturer Startup Costs 165
  • Chart 4.02: Infused Product Manufacturer Startup Costs: Processing In-House Vs Purchasing From Third Parties 165
  • Chart 4.03: Breakdown Of Startup Costs For Infused Product Manufacturers 166
  • Chart 4.04: Typical Startup Costs Per Square Foot: Infused Product Manufacturers 167
  • Chart 4.05: Median Infused Product Maker Startup Costs: Colorado, Oregon, California & Washington State 167
  • Infused Product Manufacturer Operations & Revenue 168
  • Chart 4.06: Which Products Do Infused Manufacturers Typically Make? 168
  • Chart 4.07: Portion Of Edible & Topical Makers That Perform Processing/Extraction In-House 169
  • Chart 4.08: What Portion Of Infused Product Makers Are Generating Revenue? 169
  • Chart 4.09: Typical Annual Revenue By Operation Type: Infused Product Makers 170
  • Chart 4.10: Median Infused Product Maker Annual Revenue: Colorado, Oregon, California & Washington State 171
  • Chart 4.11: Infused Product Manufacturer Typical Annual Revenue Per Square Foot 171
  • Chart 4.12: Infused Product Maker Typical Annual Revenue By Number Of Products Offered 172
  • Chart 4.13: Portion Of Infused Product Manufacturers That Operate In More Than One U.S. State 173
  • Chart 4.14: Allocation Of Monthly Operating Expenses For Infused Product Makers 174
  • Chart 4.15: Typical Monthly Operating Expenses Per Square Foot: Infused Product Makers 174
  • Chart 4.16: What Portion Of Infused Product Manufacturers Lease Their Commercial Space? 175
  • Chart 4.17: Infused Product Maker Production Facility Size 176
  • Chart 4.18: Number Of Products Infused Companies Offer 177
  • Chart 4.19: Number Of Dispensaries/Stores In Which Products Are Sold: Infused Product Makers 178
  • Chart 4.20: Number Of Full- And Part-Time Employees: Infused Product Makers 179
  • Chart 4.21: Typical Number Of Full-Time Employees By Number Of Products Made: Infused Product Manufacturers 180
  • Infused Product Manufacturer Profitability 180
  • Chart 4.22: How Long Does It Take Infused Product Makers To Hit Profitability? 180
  • Chart 4.23: Profitability Breakdown: Infused Product Makers That Are Generating Revenue 181
  • Chart 4.24: Snapshot Of Net Profit Margin: Profitable Infused Product Manufacturers 182
  • Chart 4.25: Profit Margins Of Infused Product Makers Compared To Other Consumer Goods Industries 183
  • Chart 4.26: Infused Product Maker Profitability: 2013-2015 183
  • CANNABIS TESTING LABORATORIES 184
  • Chart 4.27: Which Markets Do Testing Labs Serve? 184
  • Chart 4.28: What Portion Of Testing Labs Are Generating Revenue? 185
  • Chart 4.29: Typical Startup Costs, Annual Operating Expenses & Annual Revenue Per Square Foot: Testing Labs 186
  • Example 1: DigiPath Income Statement For Last Three Fiscal Years (Which End Sept. 30)    187
  • Example 2: Pazoo. Income Statement For Last Three Fiscal Years (Which End Dec. 31)         188
  • Chart 4.30: Testing Lab Facility Size 189
  • Chart 4.31: Cannabis Testing Method Primarily Used By Labs 189
  • Chart 4.32: Types Of Cannabis Testing Performed By Labs 190
  • Chart 4.33: Types Of Cannabis Testing Cultivators, Infused Product Makers & Retailers Demand 191
  • Chart 4.34: Number Of Cannabis Samples Tested Per Month Per Lab 191
  • Chart 4.35: Cannabis Sample Testing Time Turnaround 192
  • Chart 4.36: How Many Cannabis Clients Do Testing Labs Typically Serve? 193
  • Chart 4.37: Portion Of Cannabis That Is Lab-Tested: Retailers, Cultivators, Infused Companies 194
  • Chart 4.38: Why Cultivators, Infused Product Makers & Retailers Don’t Offer Tested Cannabis 194
  • ANCILLARY COMPANIES 195
  • Chart 4.39: When Were Ancillary Cannabis Businesses Founded? 195
  • Chart 4.40: Portion Of Ancillary Businesses That Solely Serve The Cannabis Industry         196
  • Chart 4.41: Portion Of Ancillary Businesses That Are Generating Revenue 197
  • Chart 4.42: Top 10 States For Ancillary Company Headquarters 197
  • Chart 4.43: What Portion Of Ancillary Businesses Conduct Operations In More Than One U.S. State? 198
  • Ancillary Services Firms 198
  • Chart 4.44: Ancillary Services Firms: Breakdown Of Offerings 199
  • Chart 4.45: Average Number Of States Served By Service Type: Ancillary Services Firms    200
  • Chart 4.46: Ancillary Services Firms Active In Multiple States: Number Of States Served 201
  • Chart 4.47: Ancillary Services Firms That Serve Multiple Industries: Portion Of Revenue    201
  • Chart 4.48: Ancillary Services Firms: Number Of Marijuana Business Clients 202
  • Chart 4.49: Ancillary Services Firms: Typical Number Of Marijuana Business Clients By Service Type 203
  • Chart 4.50: Ancillary Services Firms: Typical Annual Revenue By Service Type & Number Of Cannabis Clients 203
  • Chart 4.51: Revenue-Generating Ancillary Services Firms: Profitability Breakdown 204
  • Chart 4.52: Profitable Ancillary Services Firms: Net Profit Margin 205
  • Ancillary Technology & Products Companies 205
  • Chart 4.53: Most Common Types Of Ancillary Technology & Product Offerings 206
  • Chart 4.54: Types Of Packaging Solutions Typically Offered By Packaging Companies 206
  • Chart 4.55: Ancillary Tech & Products Companies That Serve Multiple Industries: Portion Of Revenue Derived From Cannabis Sector 207
  • Chart 4.56: Ancillary Tech & Product Companies: Number Of Marijuana Business Clients Served 208
  • Chart 4.57: Ancillary Tech & Products Companies: Typical Number Of Marijuana Business Clients/Vendors By Product Type 209
  • Chart 4.58: Ancillary Tech & Products Companies: Typical Annual Revenue By Number Of Cannabis Clients 209
  • Chart 4.59: Revenue-Generating Ancillary Tech & Products Companies: Profitability Breakdown 210
  • Chart 4.60: Profitable Ancillary Tech & Products Companies: Net Profit Margin 211
  • Chapter 5: Cannabis Business Funding & lnvesting 213
  • Chart 5.01: Source Of Capital To Launch: Operational Cannabis Businesses 213
  • Chart 5.02: Percent Of Marijuana Companies Backed By Founders’ Savings & Personal Debt 214
  • THE INVESTMENT OPPORTUNITY: COMPANIES SEEKING FUNDING 214
  • Chart 5.03: Percent Of Existing Marijuana Businesses Actively Seeking Funding Or Planning To In 2016 215
  • Chart 5.04: Typical Marijuana Business Post-Launch Funding Sources 216
  • Chart 5.05: Portion Of Cannabis Businesses That Currently Need Loans 216
  • Chart 5.06: What Portion Of Cannabis Businesses Are Privately Held? 217
  • THE LANDSCAPE: INVESTORS FUNDING CANNABIS COMPANIES 217
  • Chart 5.07: How Long Active Investors Have Been Funding Marijuana Businesses 218
  • Chart 5.08: Funding Stages Targeted By Active & Potential Cannabis Investors 218
  • Chart 5.09: Portion Of Active Investors Who Exclusively Buy Public Stocks 219
  • Chart 5.10: Portion Of Active Investors In Private Companies Who Also Buy Cannabis Stocks 220
  • Chart 5.11: Types Of Investments Made By Active Investors/Targeted By Potential Investors 221
  • Chart 5.12: Typical Interest Rate Cannabis Investors Have Charged For A Loan 222
  • Chart 5.13: Typical Equity Portion Investors Receive For Investment 223
  • Chart 5.14: Typical Number Of Private Companies Active Investors Have Funded 224
  • Chart 5.15: Number Of Private Companies Investors Plan To Fund In 2016 224
  • Chart 5.16: Which Types Of Privately Held Marijuana Businesses Do Active Investors Prefer? 225
  • Chart 5.17: Typical Size Of Each Investment In A Privately Held Business: Active Investors 226
  • Chart 5.18: Total Investment To Date By Active Investors 227
  • Chart 5.19: How Much More Money Active Investors Plan To Invest In 2016 227
  • Chart 5.20: How Much Potential Investors Plan To Invest in 2016 228
  • Chart 5.21: Investments In Privately Held Cannabis Businesses: Typical Investor ROI         229
  • Chart 5.22: Performance Of 12 Marijuana Public Stocks In 2015 Vs Overall Market 230
  • Chart 5.23: Investments In Publicly Traded Cannabis Businesses: Typical Investor ROI         231
  • Chart 5.24: How Active Investors Find Private Cannabis Companies To Invest In 232
  • Chart 5.25: Active Investors’ Primary Considerations When Evaluating Privately Held Cannabis Businesses 233
  • Chart 5.26: Top Mistakes Private Cannabis Businesses Make When Seeking Funding, According To Investors 233
  • THE REALITY: DEAL HIGHLIGHTS, WHAT CANNABIS COMPANIES NEED 234
  • Chart 5.27: Sampling Of Cannabis Company Single Capital Raises In 2015 234
  • Chart 5.28: A Sampling Of How Much Money Businesses Are Currently Seeking 235
  • Chart 5.29: Cannabis Entrepreneurs Predict Their Business’ Two-Year Valuation Increase 235
  • Chart 5.30: What Type Of Investments Have Cannabis Companies Offered To Angel Investors? 236
  • Chart 5.31: What Type Of Investments Have Cannabis Companies Offered To Venture Capital/Private Equity Investors? 237
  • Chart 5.32: Equity Portions Operational Cannabis Businesses Are Currently Offering In Exchange For Funding 237
  • Chart 5.33 (5.26): Interest Rates Operational Cannabis Businesses Are Currently Negotiating On Debt 238
  • Chart 5.34: Breakdown Of Planned Exit Strategies In The Cannabis Industry 239
  • Chart 5.35: What Primary Factor Would Cause Active Investors to Stop Funding Cannabis Businesses 240
  • Appendix 241
  • Methodology 241
  • Data Partners 246