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More than four years after the opening of the first legal cannabis store in Massachusetts, and 52 months after the first store opened, 270 have opened and another 200 are in the licensing process. in various stages. We have a new clinic here. There is another growing facility there. Currently, Rhode Island, Connecticut, New York, and New Jersey have legalized pot. Everyone participates in the act. No one wants to be left behind. Competition is intensifying.
The state’s first hot pot shop in Northampton closed in December as prices hit a historic low.
Total adult sales across Massachusetts are approaching $4 billion since the first clinic opened in November 2018. Prices hit $228.88 per ounce in November, the lowest since April 2020, when the economic fallout from the early stages of the COVID pandemic hit prices everywhere. November prices were down 39% year-over-year.
At the same time, more plants are being harvested across the state than ever before, reaching 2.7 million in November. With 117 growers in the state and 249 more in the licensing pipeline, cannabis is overflowing.
Despite these price drops and increased competition, marijuana business operators across the state, and in central Massachusetts in particular, need to be smarter about how they run their marijuana businesses, and the cannabis market still has an opportunity. I believe there is
In November, marijuana prices hit an all-time low in Massachusetts.
“More products and more clinics means more options,” said Ulysses Youngblood, president of Worcester clinic Major Bloom. “The market is correcting itself.”
Youngblood doesn’t worry about price cuts.
Major Bloom is building a cost-effective business designed to serve people in low-income communities.
still new to people
David O’Brien, president and CEO of the Massachusetts Cannabis Business Association, a trade group, said the market was adjusting largely because there was an overabundance of the product and not enough stores to sell it. Yes. He still sees potential for growth.
“People are still making money,” said O’Brien. “But they’re wearing their belts.”
O’Brien said tensions from investors are growing. Capital markets are slowing, fearing an economic slowdown, as publications such as Bloomberg and Business Insider report that a recession is looming.
“Capital markets of all types are tight everywhere. [the place]said O’Brien.
For local cannabis dealers, lower prices weren’t much of a concern at first.
For Marc Rosenfeld, one of the co-owners of CommCan, Inc., who has a facility in Medway and clinics in Millis and Southborough, the concern is that cash and investments coming into Massachusetts from businesses in multiple states. Come. Groups across multiple states are built to push products, funds and teams into crowded markets. They can bully small businesses and lower the price of their products. You don’t have to worry about covering the many overhead costs required to open a facility or pharmacy.
“They’re not here to run a business,” Rosenfeld said of the multistate cannabis business. “They just want market share.”
Photo | Photo | Courtesy of Komkan
Mark (left) and Ellen Rosenfeld, two of the three brothers who own the marijuana business CommCan, operate three locations across the state.
For Rosenfeld, it’s important for people to trust the product they buy, especially when it comes to something like marijuana, which includes knowing how and where it was grown.
“It’s important to understand what people are buying. Legal cannabis is still new to people,” said Rosenfield.
over-regulation
Legal pot may look new, but the business that buys it is not.
Robin Goldstein is an economist and author of Can Legal Weed Win? In The Blunt Realities of Cannabis Economics, falling prices and Northampton store closures show that regulations and costs are holding back, not the viability of his marijuana business in Massachusetts. increase.
The cannabis industry appears to be looking to add more players.
Goldstein, who grew up in Northampton and is director of the Cannabis Economics Group in the Department of Agricultural and Resource Economics at the University of California, Davis, said legal marijuana should look like an Apple Store for all safety measures. The market is tight and we can’t reach everyone who needs it. So people still buy from the black market.
For example, The Source in Northampton was the first pharmacy in the state to close on December 16th. The other he opened within a block of six pharmacies, so the stores were competing for the same customers. As Goldstein sees, there aren’t many marijuana shops. There are too many hoops to jump through, and the community is pulling stores together.
Goldstein says Worcester has the same problem. Four of the city’s 13 clinics are located in the Canal District. Near Beaver Brook and Curtis Pond he has three stores in close proximity, but no stores in other parts of the city like Tatnuck.
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