Eastern States Drive Cannabis Gains In First Half

Double-digit gains in markets like Michigan, Florida, and Missouri, as well as triple-digit growth in the new adult-use market of Maryland, propelled U.S. cannabis revenues in the first half, offsetting declines in western states like California, Colorado, Washington, Nevada, and Arizona. Overall, the top 12 states for cannabis revenue posted aggregate 4% growth to $10.4 billion in sales in the first six months of 2024. The figures don’t include the newer hemp THC category that’s gained prominence in retailers beyond the traditional dispensary sector.

California reigns as the largest market in the U.S. for cannabis, but revenues declined 7% to $2.1 billion in the first half. The state continues to be beset by a large illicit market as well as steadily falling prices and, most recently, fallout from reports of high levels of pesticides found in products in the legal market. But California was the only state among the top six that showed declining sales over the first half.

Second-ranked Michigan jumped 14% during the first six months of the year, as the state’s adult-use market continues to grow. Flower commands around a 45% share of the adult-use sector in Michigan, while vapes account for another 19%. The number of Michigan adult-use retail licenses has climbed by some 130 over the past year to number approximately 800.

In Illinois, the third-largest market in the U.S., sales were just below $1 billion in the first half on solid 5% growth. Nearly half of sales by value were flower, with vapes and edibles the second and third largest categories. “The Illinois market continues to grow primarily driven by in-state residents taking advantage of greater accessibility, lower prices, and increasing their regular consumption of cannabis,” Cresco Labs chief communications officer Jason Erkes recently told SND.

Despite currently being a medical-only market, Florida is right on the heels of Illinois in terms of sales, which rose 10% in the first half. Adult-use sales will go on the ballot in Florida this fall, with the potential to transform the Sunshine State into a $5-$6 billion annual market. Polls have shown that the measure, which has been spearheaded by market leader Trulieve, appears to have the 60% support needed to pass.

Massachusetts, a relatively mature East Coast market, ranks fifth nationally, but has been hit by falling prices, with the average price for flower down by about two-thirds from its high-water mark to around $5 a gram currently. Still, the Bay State managed to post 6% first-half growth.

Rising faster are newer adult-use markets like Missouri, ranked sixth, and Maryland, which climbed into 10th place after opening recreational sales a year ago. Maryland has the potential to overtake declining western markets like Colorado, Washington, and Arizona in the coming year if current trends continue. Missouri leveraged its robust medical market to likewise get off to a fast start in adult-use sales, which jumped 20% in the first six months of the year.—Daniel Marsteller

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