With most regulated adult-use marijuana markets reporting sales numbers through November, year-over-year growth rates in 2023 varied by market age.
New markets in Arizona, Illinois and Maine continued to grow – although at slower rates than in 2022 – while established markets such as Colorado and Nevada did not decline as much as they did in 2022.
The slowing of year-over-year sales declines in mature markets is a promising trend, as many older cannabis markets experienced double-digit contraction in recent years.
For example, Colorado recreational sales declined 16% between 2021 and 2022.
Growth rates in new recreational marijuana markets usually slow as they enter the third or fourth year of sales.
Yet turmoil in the cannabis industry and economy in 2023 likely hampered sales in new marijuana markets, causing them to underperform.
If we compare Arizona to other new market starts, the state’s marijuana industry should still have had strong upward growth going into 2023, its third year – but it didn’t.
The same could be said for Illinois, which entered its fourth year of adult-use marijuana sales in 2023.
Many states still report record monthly sales numbers by dollar amounts, but year-over-year growth is slowing more than it did in years with fewer economic challenges.
MJBizDaily took a state-by-state look at adult-use sales in 2023 using data from state regulators and Seattle-based data analytics firm Headset. (Note: States that do not release cannabis sales numbers have been excluded.)
Arizona
Sales started strong in 2023, continuing the rapid growth Arizona operators have experienced since launching regulated adult-use marijuana in 2021.
Monthly recreational marijuana sales for 2023 peaked in March at $100 million.
The monthslong decline in sales since March is a worrying trend for a marijuana market that still should be growing, based on trends seen in other states.
Year-over-year growth through October 2023 was 14%, compared with 44% for the same period between 2021 and 2022.
Observers can expect some minor upward adjustments in late 2023 sales numbers, as state calculations are based on tax collections that often lag by a couple of months.
California
The world's largest cannabis market continues to struggle after California - like many other marijuana markets - experienced explosive sales in 2020.
Post-pandemic marijuana sales in California started to slip in late 2021, according to Seattle-based data analytics firm Headset, with year-over-year sales declining 11% between 2021 and 2022.
If there is an upside for California's regulated cannabis market, year-over-year sales through November 2023 are down only 8% from the same 11-month period in 2022.
It's hard to say if this represents a true recovery, but the news is promising.
Colorado
A review of 2019 sales data offers the best view of Colorado's recreational marijuana sales figures.
Declining year-over-year cannabis sales in 2022 and 2023 brought market value back to pre-pandemic levels.
Total recreational sales for January-October 2019 were $1.18 billion, while the state recorded $1.15 billion for January-October 2023, the latest data available.
Sales for that same 10-month period declined 12% from 2022, compared with 16% for the same period between 2021 and 2022.
While marijuana sales might continue to decline this year in Colorado, the pace of decline could continue to slow as in other mature markets such as California and Oregon.
Connecticut
The first year of recreational sales reached nearly $131 million through November and is on pace to hit $145 million, as the state has averaged about $14 million in sales per month since August.
MJBiz Factbook projections for Connecticut were $200 million, so it's safe to say the market is underperforming.
The difference could be attributed to general economic conditions under which most cannabis markets are struggling, but local operators also blame the lack of product selection, which might be prompting consumers to buy marijuana in neighboring Massachusetts.
Most new markets show substantial growth during the first three years of adult-use marijuana sales, so Connecticut could defy expectations in 2024.
Illinois
Sales growth in the Illinois adult-use market stalled going into its fourth year of recreational marijuana sales.
Through November 2023, the state reported $1.48 billion in sales, up 5% - or $72.6 million - from the same period in 2022.
Expect numbers for December and January to continue a strong sales trend, but only time will tell if sales growth continues in 2024 or if stability will give way to decline.
Maine
Adult-use cannabis sales growth began to slow this year in Maine, despite the market posting record sales numbers in 2023.
Recreational cannabis sales totaled $216 million this year – an increase of 36% over 2022.
The growth rate would be enviable if not for the previous year, when sales almost doubled between 2021 and 2022.
Declining year-over-year growth rates are expected in new markets, but the dip in the state's third full year of adult-use sales seems more drastic than most.
Maryland
The state's new adult-use cannabis market brought in $331 million in 2023, averaging about $55 million per month since launching in July.
Maryland's population density and location on the East Coast will make it a market to watch during 2024.
Massachusetts
Much like in Illinois, recreational marijuana sales in Massachusetts slowed in 2023.
Monthly sales might still be record-setting, but overall growth has stalled.
Annual sales were $1.42 billion through November 2023, up 5% from the same 11-month period in 2022.
The growth rate is down significantly from 2021-22, which saw 12% growth during the same period.
Michigan
Only California sells more recreational marijuana than Michigan.
The state's adult-use market hummed along in 2023 and was on pace to reach nearly $3 billion in sales as of November, the latest month for which sales data is available.
Michigan has not experienced the drastic decline in growth rate seen in other states, with year-over-year sales through November slipping from 55% in 2021-22 to 48% in 2022-23.
Michigan sales are expected to be strong going into 2024, but look for growth rates to continue contracting as the market matures.
Missouri
The recreational marijuana market launched in February 2023 and reported $833 million in sales through October, the latest available numbers.
Sales declined slightly in October, but figures for November and December are likely to show an increase, putting the market close to $1 billion in sales for 2023.
Montana
Many new markets see sales almost double in the second year.
For example, Maine saw second-year sales grow 93%, while sales grew 90% in Colorado.
This was not the case in Montana.
Adult-use marijuana sales in the state grew 23% in 2023, bringing in a total of $258 million.
It will be interesting to see if the sales-growth rate holds or climbs in 2024, especially as the state is reliant on summer tourism to boost sales.
Nevada
Following the script seen in other mature markets, adult-use sales in Nevada are hovering around pre-pandemic levels.
The state experienced almost 28% year-over-year sales growth in 2021, when tourists were eager to travel after being indoors for most of 2020.
Unfortunately, the enthusiasm faded, and year-over-year sales growth has since declined.
But the 4% decline seen in 2023 was not nearly as bad as figures from 2022, when sales slipped almost 12% though November.
New Mexico
Recreational marijuana sales launched in April 2022, making New Mexico a newer adult-use market.
The state averaged $32 million in sales per month in 2023 and totaled $393 million for the year.
While New Mexico is not reaching the same volume as Arizona, it has only one-third of its neighbor's population.
Additionally, Texas residents are helping to bolster sales numbers by crossing the state border into Clovis, Hobbs and Sunland Park to purchase regulated cannabis in New Mexico.
New York
New York consumers, investors and operators still are waiting for the state's recreational marijuana market to ramp up to its full potential.
The slow rollout of stores during New York's first 11 months of adult-use sales meant the state sold only $123 million in regulated cannabis.
That is a far cry from the $425 million projected by the MJBiz Factbook for the state's first year of sales.
Retail expansion and efforts to curb the illicit market should keep growth at a steady pace in 2024.
Oregon
The state sold more than $1 billion in recreational marijuana in 2020 and 2021, but steady declines since then meant Oregon's adult-use sales were $901 million in 2023.
Year-over-year sales growth did not decline as much in 2023 as in the previous year, so sales might recover in 2024.
Rhode Island
Total adult-use marijuana sales in Rhode Island topped $74 million in 2023.
That exceeds the $50 million sales projection by the 2023 MJBiz Factbook for the first year of recreational marijuana retail sales.
Look for growth to continue into 2024 for the emerging adult-use market.
Washington state
As in other mature markets, recreational marijuana sales in Washington state have cooled since the record-breaking months of the COVID-19 pandemic.
Another similarity with markets such as California, Colorado and Oregon: Year-over-year growth in the state slowed in 2023.
Washington state sold about $1.13 billion in adult-use marijuana through November 2023, down just slightly from the $1.18 billion it sold during the same period in 2022.
Andrew Long can be reached at andrew.long@mjbizdaily.com.
