Cannabis Sales In U.S. Hit $32B In June: Key Drivers Behind All-Time Record Revealed

U.S. cannabis retail sales hit an all-time high in June, with an annual run rate of around $32 billion. According to LeafLink’s Summer 2024 market report, the surge reflects a 10% year-over-year increase driven by strategic market expansions and favorable policy changes.

Key Drivers Behind Sales Surge

Ben Burstein, corporate development manager at LeafLink, shared insights with Benzinga regarding the factors fueling this unprecedented growth. “This year, average monthly retail sales in cannabis rose by 5.1%, with states like New York, Maryland, Florida, Michigan and Missouri leading the charge,” he explained. These states, which introduced numerous new retail outlets, have seen substantial sales increases due to improved consumer access and the rollout of adult-use cannabis sales.

The adoption of adult-use cannabis sales in Missouri and Maryland also played a crucial role. These states transitioned from medical-only markets to adult-use markets, resulting in a 2-2.5x increase in total retail sales compared to early 2023.

Burstein says he’s is optimistic about sustained growth. He pointed to the extensive license issuance expected in states like New York, New Jersey, Maryland, Ohio, Illinois and Minnesota, which will add over 5,000 new stores in the next 12-24 months.

Tourism’s Role In Boosting Cannabis Sales

Tourism also plays a significant role in cannabis sales, especially in states like Alaska and Nevada. With low populations relative to the number of annual tourists, these states see substantial cannabis consumption from visitors. Alaska, with an estimated 2.7 million annual tourists and Nevada, with $40.8 million, benefit greatly from this dynamic. “Tourists have a high propensity to consume cannabis products while on vacation,” Burstein said.

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States With Promising Sales Growth

The report further highlights promising growth trends in several states. Over the next two years, LeafLink projects a $7 billion increase in total U.S. retail sales, with 60% of this growth coming from states with the highest pending license issuance. New York and New Jersey are expected to add roughly $1.3 billion each in annual sales, driven by a surge in new retailers, processors and cultivators. Ohio and Illinois are also set to see significant growth with the launch of adult-use sales and new social equity licenses.

Cannabis Rescheduling Projected Impact

On the federal front, the potential rescheduling of cannabis to Schedule III could inject an additional $2-$3 billion annually into industry cash flows. Burstein expects companies to reinvest this capital into business expansion, mergers and acquisitions and returning capital to investors.

Maintaining Price Stability And Long Term Market Growth

Despite the rapid expansion and positive forecasts, pricing stability remains a key focus. Burstein explained operators are managing to keep prices stable by right-sizing supply in line with demand, particularly in mature markets like California and Oklahoma. However, he also points out that the upcoming outdoor harvest could lead to price fluctuations, although these are expected to be less severe than in previous years due to a more balanced market.

As LeafLink looks towards a projected $50 billion market by 2030, driven by increased retail accessibility and legalization in large population centers. States like Florida, Pennsylvania, Texas, Georgia and North Carolina are seen as potential major contributors to this growth. “The primary driver of new growth will be more retail accessibility,” Burstein concluded.

Image generated with AI tools.

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