Massachusetts Nears $400 Million in First-Year SalesDecember 10, 2019
According to a report from the Massachusetts Cannabis Control Commission, gross recreational sales of cannabis totaled $393.7 million in the market’s first year. Sales began last November with two stores and, since then, 31 have opened statewide with another 54 awaiting final approval from the state.
While Massachusetts’ total sales figure is dwarfed by California’s $2.5 billion in legal sales in 2018, or even Colorado’s $1.5 billion, zooming in on the level of individual stores reveals some interesting results about the young Massachusetts market. California and Colorado both had far more retailers in operation last year—approximately 600 and 550, respectively—but on a per-store basis Massachusetts dispensaries far outpaced the average store in either of those states. California stores brought in an average of just over $4 million each and Colorado locations brought in just under $3 million each; in contrast, Massachusetts’ retailers averaged nearly $12 million per store.
One outlier is Theory Wellness in Great Barrington, located less than 10 miles from the New York state line. CEO Brandon Pollock told WAMC in July that the store had already brought in $17 million by that point in the year, having opened last January. The store employs 140 people and serves up to 1,100 customers a day.
As the only state in the northeast with a recreational market (Vermont and Maine both legalized cannabis but have punted on allowing sales), it’s an open question whether a significant portion of sales are going to out-of-state residents. Outside of a concentration in the Boston area, most stores are in proximity to the state’s borders. Pollock estimated that about half his customers are “people on vacation or something like that.” It’s not illegal for non-residents to purchase cannabis in a legal market, though coming back across state lines while in possession is illegal.
The Commission’s report did not include tax revenue information but a quick estimate indicates that the state likely took in approximately $60-$70 million for the year. Massachusetts imposes a 17% excise tax on sales—slightly higher than Colorado and California’s 15%, though California augments that with cultivation fees—as well as an optional 3% local sales tax.—Danny SullivanSubscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning. You will also receive the Cannabis edition as part of your subscription.