With a recent wave of states legalizing recreational and medical marijuana, exciting investment prospects and growth opportunities are cropping up all over the country. But legalization is the first in a complicated, multi-step process of getting cannabis into consumers’ or patients’ hands. Here, Brightfield Group sheds light on the states that have been mired in bureaucracy, and those that might be the rising stars, among the states that have recently legalized.
Illinois:
Rapid Growth and Great Potential
Though medical marijuana was legalized in Illinois in 2013, delays in licensing and government hurdles caused the market to take off only last year. However, that growth is promising, given the state’s vast population of 12.8 million, according to 2016 data from the U.S. Census Bureau.
During 2016, the Illinois medical marijuana market grew 20 times over the previous year—to $35,931,418—and per Brightfield’s projections, it is poised to expand fourfold in 2017, making it a $145 million market with great potential for continued growth.
New York:
Slow, but Steady Growth
With a population of 19.7 million, New York is another behemoth among the states to legalize marijuana in recent years. However, New York’s progress has been slow, with less than $15 million in sales in 2016 despite having legalized medical marijuana in 2014. Barriers such as limited qualifying conditions and restrictions on product types have restricted patient access and interest in the past. New York’s Department of Health is working to dismantle some of these obstacles by increasing the list of qualifying conditions (including chronic pain) and allowing nurse practitioners to write recommendations, among other adjustments.
However, the restrictions on product types remain (the state does not allow smokable cannabis products), and the government is planning to award additional licenses, which would make it even more difficult for existing businesses to survive. Given the extremely high licensing fees and the high start-up costs for New York licenses, cannabis businesses in this state must be prepared to continue battling for profits for years to come.
Florida:
Facing Roadblocks, but Determined
Florida voters showed their support for medical cannabis in 2016 with an unprecedented 71 percent of votes in favor of expanding the existing CBD-only program to a full medical marijuana program, opening it up to patients with a much larger list of qualifying conditions. Despite this wide support, the legislature has taken a cautious approach in setting up both the CBD-only market and the full medical market. The state’s initial highly restrictive market finally launched in the second half of 2016, and sales have been slow to pick up. By 2021, however, with the expected increase in licensed dispensaries, greatly improved patient access, as well as improved diversity and availability of product, Brightfield projects sales will reach $713 million, making it the second-largest medical market in the country, behind only California. Florida’s regulatory environment may require patience, but it is worth the wait.
Massachusetts:
A Slow Start With Great Promise
Though medical marijuana was legalized in the state back in 2012, today there are only 11 dispensaries licensed to sell to medical marijuana patients in Massachusetts (per state data). Despite this, in 2016 voters elected to also legalize recreational marijuana. Not long after November, legislators delayed licensing cannabis shops until July 2018. Even with those delays, this is expected to be a $60 million cannabis market for 2017, and recreational sales are expected to clear $150 million by 2020.
Maine:
Minimal Growth Expected
Like Massachusetts, Maine voted to legalized recreational cannabis in 2016, but by a very thin margin, even leading to a vote recount. Here as well, the state legislature has delayed the licensing of retail cannabis shops until 2018. The state is small; its support of recreational marijuana is lukewarm; and proponents are battling with the state for implementation, thus its growth will likely be stunted and minimal in the coming years.
