As Maine's Cannabis Sales Double In 2022, Some Wonder If The Market Is Becoming Overcrowded

According to data recently released by Maine's Office of Cannabis Policy,  recreational cannabis retailers reported nearly 2.5 million sale transactions, totaling $158.9 million. This movement nearly doubled 2021’s sales of $82 million.
Last year’s sales also earned the state roughly $16 million in tax revenue, reported Central Maine, a local news outlet.

Maine's Recreational Cannabis Market

Since October 2020, when the state began its cannabis market operations, sales went from roughly $1.4 million to over $17 million in August 2022. December sales reached $15.2 million.

“(The growth) reflects the significant economic impact that legal cannabis continues to have in the communities that have opted into the system,” said John Hudak, director of Maine's Office of Cannabis Policy who expects continued growth in 2023. “The system is creating jobs, helping revitalize communities, and having a positive economic impact on businesses that help the industry function.”

Acreage Holdings Inc. ACRDF, which operates a number of dispensaries in Maine, recently reported that "sales were flat seq ($61.4Mn) with New Jersey, Ohio and Maine, all posting growth," said Cantor Fitzgerald's Pablo Zuanic

More Than Revenue Increases

Hudak says however that "there’s more to it than just increased revenue." Industry professionals say the market is oversaturated. Regulations and the cost of doing business is expensive, there are not enough testing labs and a lack of cannabis-friendly banks can cause financial havoc, noted Central Maine.

In addition, buyers are seeing more variety and lower prices. The average price of smokable cannabis flowers has been cleaved in half from $16.68 per gram at market launch to $8.18 per gram as of December.

Kaspar Heinrici, director of business development at Seaweed Co., noticed “emerging sophistication” as the market has matured and more products have come into circulation. "While sales numbers have doubled, the growth more reflects the increase in stores than an increase in customers," said Heinrici, who adds that as more dispensaries open, sales volumes could actually be diluted.

To Expand A Regulated Market, Total Access To Cannabis Is Needed

Due to the need to expand and a desire to be in a more tightly regulated market, many medical marijuana merchants have converted to recreational sales.

“That’s something we are trying to promote, the idea that it’s all cannabis (…) At the end of the day what we all want is for people to have access to cannabis and have access to the best quality at the best price,” Heinrici concluded.

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Photo: Courtesy Of Mercedes Mehling On Unsplash