Week in Review: US cannabis sales to top $15B, Illinois licensing delays, NJ at forefront of legaliz
Published July 3, 2020| By Jeff Smith
Moreover, total U.S. sales could reach as high as $37 billion by 2024.
MJBizDaily takeaway: The projections come with a big, two-pronged caveat: The coronavirus pandemic and the recession.
Cannabis spending has been robust in markets that aren’t tourist-dependent.
But strong sales activity in those markets also has come at a time when unemployed workers have been receiving an additional $600 per week in benefits.
It’s unclear what will happen if those benefits aren’t extended past the end of July and the recession and coronavirus crisis linger.
That will be the test of whether marijuana is truly recession-proof.
Illinois adult-use licensing remains on hold
Illinois has delayed issuing 80-plus craft cultivation and infuser permits for its nascent adult-use market, with no clear signal when the licenses might be granted.
All told, the state has put on hold 75 retail licenses, 40 craft cultivation permits, 40 infuser licenses and an uncapped number of transporter licenses.
MJBizDaily takeaway: The delays caused by the coronavirus have benefited existing cannabis operators. They continue to experience strong demand in a market that launched Jan. 1.
Monthly sales have consistently hit around $40 million, with May reaching a record $44.3 million.
The state is limiting retail licenses, which should bode well for new entrants who manage to secure a permit.
On the flip side, many applicants have spent tens of thousands of dollars on real estate and other expenses while waiting to win a license.
Moreover, lingering delays could make it more difficult for new licensees to win market share from current operators, which are becoming more entrenched.
New Jersey linchpin to East Coast legalization?
Not long ago, New Jersey and New York were in a heated race to see which state would legalize recreational marijuana first.
But, at least right now, all eyes are on New Jersey, which has an adult-use initiative on the November ballot.
MJBizDaily takeaway: An expected nod for legalization by New Jersey voters will put a tremendous amount of pressure on budget-strapped New York to follow suit – or lose out on revenues.
Moreover, a yes vote in New Jersey could trigger a ripple effect along the East Coast.
Adult-use legalization is seen as virtually inevitable from Connecticut to Pennsylvania to Maryland. It’s just a question of when.