New England Holds Cannabis Business Potential, Despite Limited Market Size and Heavy Regulations

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The Green Wave has washed over all of New England.

On Tuesday, New Hampshire became the last state in the northeastern corner of the country to pass medical cannabis laws, making the region a stronghold for the MMJ industry.

The area has quickly become a hot market for cannabis business: Several dozen dispensaries and grow sites will open up in New England in the coming years, giving rise to additional opportunities for companies providing ancillary and support products and services.

Once the region’s medical marijuana market is fully functioning – meaning patient registries and dispensaries are up and running in each state – medical marijuana sales could initially total an estimated $40 million to $60 million via a network of 60-70 centers, according to Medical Marijuana Business Daily’s estimates. The largest market will most certainly be in Massachusetts, where up to 35 dispensaries could eventually open.

Despite its potential, New England’s medical marijuana industry will be much smaller than other areas out West, where lax regulations, generous medical conditions lists, no caps on dispensaries and other factors have given rise to markets that are much larger. In fact, many western states already generate more in medical marijuana sales individually than the entire New England region combined will in the future (dispensaries in California, for example, tallied more than $700 million last year, while those in Colorado bring in around $200 million).

However, the business opportunities should not be overlooked. This is a brand new industry in most of New England, and there is room for many different types of players such as accountants, lawyers, packaging providers, cultivation equipment manufacturers, advertising firms, etc. And although strict regulations create high barriers to entry, they will also lead to a more stable business climate than what we’ve seen out West, where constant turmoil has created difficult conditions and enormous uncertainty.

It took 14 years for every state in New England to pass medical marijuana laws since Maine became the first to do so back in 1999.

But the dominoes have fallen quickly over the past year.

Three states – Connecticut, Massachusetts and New Hampshire – adopted MMJ laws in just the past 18 months alone. And while Vermont and Rhode Island approved the use of medical marijuana in 2004 and 2006 (respectively), they didn’t move forward with the business side of the equation until now: The first dispensaries opened this year in both states after countless delays, legal wrangling and other setbacks. Main ranks as the elder statesman

Photo credit: Karen Walters via Flickr