Maine Profits $200M from Recreational Weed in 2023
Everyone is wondering how the legal recreational cannabis markets performed in 2023. The reports are starting to come in. In 2023, Maine’s adult-use market grossed $200 million, a number that represents a 36% increase from the previous year, 2022. But industry insiders warn that the numbers are hiding a larger problem of market oversaturation.
Recreational marijuana sales in Maine generated around 36% more profits last year compared to 2022. However, industry members have cautioned it’s not all roses with the state of the market.
Shop owners across Maine say the market is overcrowded and the increase in sales owes to the opening of new shops, not shops earning more money than before. The expansion of the market has led to flattening prices of cannabis, which may be good for consumers, but bad for farmers, retailers and other players in the sector.
The Maine Office of Cannabis Policy issued its annual data report on Monday, Jan. 8, and according to it, the state’s licensed recreational retailers made over 3.7 million sale transactions, which together are worth $217 million. In 2022, Maine’s cannabis shops grossed $159 million, and brought in $21 million into state coffers.
“The sales numbers are up almost 40%. That’s a strong testament to how the industry continues to grow,” John Hudak, director of the office, told the Portland Press Herald. “But hidden in these numbers, too, is a pretty significant decrease in price.”
Cannabis prices fell for roughly 16% in the course of 2023, Hudak pointed out. “Even with the increases in overall sales, the decreased prices do make it harder to operate,” Hudak said. “Eventually we’re going to see business closures.”
From Limited Weed Supply to Overcrowded Market
Maine voters approved recreational marijuana on the ballot in the November 8, 2016 elections. However, the market was launched four years later, in 2020, in what is now seen as one of the slowest rollouts in the history of U.S. legal cannabis. When it started, Maine’s state market struggled with the opposite problem it’s currently facing. The supply of weed was short and the costs were high.
Today, the Pine Tree State has 138 stores, 68 manufacturing facilities, 88 cultivation sites and five testing labs, writes the Portland Press Herald. Weed consumers can enjoy a greater diversity of products, at lower prices, and at many more locations. Just last year, seven new towns joined the list of places where adult-use marijuana is available. But all of this has caused prices to plunge.
The average price of smokable marijuana flower has been down by more than half from $16.68 per gram in 2020 to $7.53 per gram at the end of 2023.
Mark Benjamin, owner of Botany in Rockland, told the Herald that more people now visit his shop than when he opened in the last quarter of 2021, but prices have indeed fallen down. Benjamin and his team have offered various incentives for customers in order to stay profitable.
“There may be tens of millions of dollars flowing into (the market), but it is certainly spread across more stores,” he said.
While the Botany in Rockland will start the year with opening another shop at a new location in Belfast, Maine, its owner acknowledges that not everyone in the sector is in the same favorable position. In particular those who don’t have access to capital.
“Everyone was dropping and dropping their prices in order to get enough cash in the door to cover their costs,” Benjamin said. “The weaker players are starting to drop out of the market,” he said.
Correction of the market is natural part of the cycle when markets get dense. It seems that the balancing will affect both the medical and recreational segment.
“I’m seeing the medical side suffering as the recreational side increases,” David Vickers, owner of Origins Cannabis Company in Augusta and Manchester, said. “That to me, long term, may not be a good thing for Maine. We have so many small farmers that may very likely lose their livelihood,” he said.
Could anything aid the situation, besides closing some of the shops? The answer might be tourism, especially in the southern coastal towns. Most business owners actually believe this to be the main source of growth for the next couple of years.
“You’re going to continue to see people flocking to Maine,” Vickers said. “I don’t think we’ve hit the summit yet, but I think we’re certainly getting there. There are only so many people in Maine.”
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Stephen Andrews
