According to a report by MJBizDaily, cannabis sales across the United States have been a mixed bag as the year crosses the halfway line. There are plenty of reasons behind these unevenly distributed sales performances, but perhaps the most significant cause is inflation. Reduced disposable income caused by the economic decline experienced this year presents a threat to the cannabis sector. It has been detrimental to several legal marijuana markets across the country and could lead to an overall subpar year for the industry.
That said, not all states with legal marijuana markets have suffered the wrath of the cannabis recession. Emerging recreational and medical marijuana sectors in states like New Mexico, Maine, and Michigan, have displayed tremendous growth in the last seven months. Although such development is commonplace for burgeoning cannabis markets, it also shows that the industry has the potential for exponential expansion.
Compared to the same period last year, the adult-use marijuana market in Maine and Missouri’s medical cannabis program have almost tripled in sales. They rose by 159% and 174%, respectively. Medical cannabis sales in Utah grew by 87%, while Iowa boasted a 63% improvement from last year’s midyear medical weed sales. Similarly, recreational marijuana sales in Arizona, Michigan, and Illinois rose by 64%, 57%, and 20%, respectively.
On the other hand, some mature cannabis markets experienced a decline in sales in the first half of this year. As more jurisdictions legalize recreational cannabis, consumers are shifting from prescribed medical cannabis to adult-use marijuana. Consequently, this has taken a toll on mature medical marijuana programs in states that now offer adult-use cannabis.
For instance, compared to the first half of 2021, medical cannabis sales in Colorado have dropped nearly 43% this year. Michigan’s medical marijuana sales also experienced a significant drop of about 41%. In Oregon and Arizona, sales fell by 37% and 16%, respectively.
At the moment, it’s difficult to tell whether the cannabis industry will end the year on a high note. Besides inflation, various issues must be resolved before the year ends to ensure the sector remains on an upward trajectory. One such factor that can jeopardize marijuana’s prosperity is the imbalance between supply and demand.
In many cannabis markets, production outpaces consumption due to a competitive business landscape. As a result, cannabis brands and retailers are discounting their prices to help reduce swelling inventories. Therefore, wholesale and retail marijuana prices are on a downtrend. This affects everything from cannabis products to smoking accessories and other equipment.
This supply-and-demand tussle, coupled with increasing economic pressure, could result in an unsatisfactory year for cannabis sales. Nevertheless, the marijuana industry has proven resilient even during difficult economic times like the COVID-19 pandemic. Many are waiting to see how the sector will perform in the second half of this year.