Multiple States Across The Country See Record-Breaking Marijuana Sales To Close Out 2023

More than a half dozen U.S. states where marijuana is legal notched record-breaking monthly sales in December, with many relatively new adult-use cannabis markets continuing to expand and American shoppers in general stepping up holiday spending.

Most of the monthly sales records were seen in states that legalized marijuana more recently and, as a result, are still experiencing the early growth of markets in their emerging stages. Connecticut, for example, which started sales a year ago, set new monthly sales records every single month of 2023. Maryland also set records during every single month of sales last year, though retail stores didn’t open until July.

But even in Illinois, which has now seen three full years of adult-use sales, December’s adult-use numbers were up sharply, rising nearly $15 million from a month earlier. Massachusetts retailers also hit a high mark after first opening in 2018, up $11.5 million from the month before. December tends to be a strong sales months, even in more mature markets. And Michigan, which saw sales begin in 2019, saw a spike in sales to end a record-setting $3 billion year.

Sales in New Mexico and Rhode Island, meanwhile, continued to grow steadily, while Missouri’s less-than-year-old recreational marijuana market plateaued, with figures increasing only slightly over the year after retailers opened their doors in February.

In nearly all states, rising adult-use cannabis sales have coincided with falling sales of medical marijuana, as some patients turn to recreational retailers out of convenience, due to product price or selection or to avoid state registration.

Though some states have seen sales numbers flatten or fall over time, the marijuana market across the United States as a whole is expected to continue to scale up as more states come online and younger systems continue to mature. The multinational investment firm TD Cowen said last month it projects legal cannabis sales will reach $37 billion in 2027, up from what it said was about $29 billion in 2023. At least some of that growth is expected to come from increased substitution of cannabis for alcohol, particularly among younger adults.

Connecticut

Recreational cannabis sales in Connecticut began a year ago, in January 2023. By May, adult-use purchases had surpassed medical marijuana sales, which slowed slightly over the course of the year. Between both the recreational and medical markets, sales for all of 2023 came in at more than a quarter-billion dollars—$274 million.

In December, adult-use retailers sold just over $17.1 million in cannabis products—continuing a string of consecutive monthly records—while medical marijuana sales exceeded $10.3 million. Together, the markets’ roughly $27.5 million in sales marked the highest single-month sales total so far recorded, according to the Connecticut Department of Consumer Protection (DCP).

“One year ago, the state of Connecticut opened an entirely new market, creating jobs, opportunity, and a safe, regulated way for adults to purchase cannabis,” DCP Commissioner Bryan T. Cafferelli said in a statement earlier this month. “Since then, many new businesses have opened and more are on the way. We are proud of the work carried out by our agency over the past year, and we are looking forward to continued growth, fair regulation, collaboration with our sister agencies, and thoughtful problem solving as new challenges present themselves in the years to come.”

Illinois

December has typically been a strong marijuana sales month in Illinois, and 2023 was no exception.  After ups and downs in sales during the first part of the year and a plateau during the second half, adult-use receipts climbed nearly $15 million from November to December.

All told, between recreational and medical markets, legal cannabis sales in Illinois set a new annual record in 2023, reaching just under $2 billion.

December’s adult-use sales not only set a record for the recreational system, it also contributed to combined sales records between adult-use and medical marijuana markets—even as medical sales have slowly decreased in recent years.

Recreational marijuana sales generated $417.6 million in tax revenue for the state in 2023, according to the Illinois Department of Revenue.

“From day one, my administration has put equity first to build the most accessible cannabis industry in the nation,” Gov. J.B. Pritzker (D) said in a press release announcing the fiscal data on Thursday. “Our work will continue to repair past harm while providing opportunities for communities across the state and creating a more prosperous future.”

Maryland

After opening legal cannabis sales to adults on July 1, Maryland recreational marijuana retailers sold more than $330 million in 2023, contributing to nearly $790 million worth of total sales for the year between the state’s medical and adult-use markets.

In December, recreational sales—which have set new records every month since the market opened—tallied more than $61.5 million, while medical sales came to just under $35 million, an uptick of more than a million dollars from the month before, but notably less than medical marijuana sales prior to the opening of adult-use stores.

As for government revenue from cannabis purchases, state officials reported last month that Maryland brought in more than $12 million in marijuana taxes during the first quarter of legal sales to adults.

Gov. Wes Moore (D) said at the time that the “strong revenues” so far “reflect the strength of the rollout of Maryland’s newly formed adult recreational cannabis industry,” saying the money is “critical to supporting social equity and economic growth, which are central” to his administration’s values.

Massachusetts

Massachusetts marijuana retailers sold a record $158.7 million worth of legal cannabis products in December, bringing the state’s total recorded sales for 2023 to nearly $1.8 billion. Most-ever sales to adults, at $140.0 million for the month, were largely responsible for December’s overall record.

As of the end of 2023, adult-use retailers had seen more than $5.54 billion in total sales since opening in late 2018. Recreational sales also now make up the vast majority of legal marijuana sales in the state: Of the total for 2023, more than 87 percent ($1.57 billion) came from adult-use sales.

Though medical marijuana is not subject to state tax, adult-use products incur a 10.75 percent excise tax in addition to the state’s 6.25 percent sales tax. Municipalities can add up to another 3 percent tax on top of those. State data showed for the first time in 2022 that the state is generating more tax revenue from marijuana than alcohol.

Michigan

Michigan saw more than $3 billion in purchases during 2023, with the vast majority coming from adult-use sales. In December alone, licensed businesses tallied a record $279.9 million in total sales. Of that, about 99 percent ($276.7 million) came from recreational sales.

Michigan voters approved adult-use marijuana legalization in 2018, with retailers opening the next year.

Officials said in November that tax revenue from legal marijuana grew by 49 percent compared to the previous year, surpassing the amount of revenue made from alcohol sales. Marijuana sales incur a 10 percent excise tax—among the lowest rates in the nation—as well as a 6 percent state sales tax.

In October 2023 alone, officials said, the marijuana excise tax produced $52.4 million in tax revenue—more than any other single source aside from sales and use taxes, income taxes, insurance taxes and tobacco taxes.

Missouri

Missouri launched adult-use marijuana sales in February of last year and almost immediately began recording roughly $100 million in monthly sales. Overall in 2023, medical and recreational retailers combined sold more than $1.3 billion in cannabis products.

While medical marijuana sales have declined notably since the opening of the adult-use market, recreational sales have slowly grown. As such, while adult-use sales set a record in December, at $106.5 million, overall sales were down slightly from a record set in February.

As the state approaches the first anniversary of legal adult-use sales, officials are still working to make accompanying changes to the criminal justice system. Earlier this month, state courts asked lawmakers for an additional $3.7 million to continue expunging past cannabis-related criminal records, noting that many older records are not digitized and require manual processing. Courts initially received $4.2 million to complete the process.

The law has already led to the expungement of more than 100,000 marijuana cases from court records.

New Mexico

Sales of legal marijuana in New Mexico jumped to $50.5 million in December, with adult-use retailers selling about $37.5 million and medical dispensaries adding another $13 million to that. That marked records both for combined markets as well as recreational sales alone.

Since adult-use marijuana stores opened their doors in April 2022, the market has seen $608.4 million in total purchases, with medical sales accounting for about $307.5 million.

Bigger purchases than in past months drove December’s sales boost, with the average medical transaction coming in at just under $52 and the average adult-use sale at about $42.50. The average transaction price in both markets has risen slightly in the past two months after the figure in both markets hit their lowest-ever points in October.

It’s not clear from the publicly available sales data whether the higher averages are due to more expensive products or consumers and patients buying more.

According to a state labor report released last June, workers in New Mexico’s marijuana industry are enjoying higher pay on average than they were earning at their previous jobs.

Rhode Island

December 2023 in Rhode Island saw nearly $7.8 million in adult-use marijuana purchases—not only a monthly record, but also more than double that of December 2022, the state’s first month of legal sales. Over the course of the past year, sales figures in the state’s recreational system have grown steadily as medical sales have slipped somewhat.

The strong growth in adult-use sales has made up for the dwindling medical purchases, with December’s combined sales still coming in at $10.2 million, breaking a previous record set in August.

All told, 2023 saw more than $100 million in legal marijuana sales in the Ocean State, roughly two thirds of which were purchases by adult-use consumers.

Rhode Island Gov. Dan McKee (D) recently celebrated the state’s first year of legal adult-use sales, which came to a close at the end of November. During that period, total sales reached $105.0 million, with almost $70 million from adult-use sales.

“A year into adult-use cannabis sales in Rhode Island, we are proud of the careful execution that defined our entry into this industry,” he said. “This success represents growing opportunity for our state’s economy but also for the nearly 70 licensed cultivators, processors, and manufacturers in the State of Rhode Island which we know are integral to our local cannabis supply chain.”

Marijuana Will Gain Millions Of Consumers Over Alcohol, With Sales Hitting $37 Billion By 2027, Investment Bank Projects

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