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The recreational cannabis market in Connecticut has hit a snag less than a year after it was launched. At the time of its launch, the market had 13 retail outlets. However, latest figures show that overall sales of recreational as well as medical marijuana have dipped, which isn’t common for a new market.
Total marijuana sales from October dropped from the $25.2 million recorded the previous month to $24.8 million. Recreational sales made up roughly $14.7 million of the total sales, with state data showing that since August, recreational sales had risen by only 5%.
Experts attribute this decline in sales to a lack of variety in products sold to consumers, which has seen many visit stores in neighboring states such as Massachusetts. The dip in sales also reflects a combination of other factors, including high barriers for those who would like to enter the market; regulatory restrictions such as bans on products including pills and capsules; and more municipalities restricting recreational sales and other marijuana businesses.
White Oak Bridge CEO Justin Frytz stated that most consumers in Connecticut choose not to visit dispensaries in the state because the product quality doesn’t meet their standards. Frytz also noted that consumers preferred going to Massachusetts because the product quality is better and they have more choices. He pointed out that manufacturers had shortened or cut production runs on some medical cannabis product lines in favor of recreational products that could generate higher margins and were more scalable. This, he argued, affected medical patients who couldn’t get quality products and also stymied the full potential of the market.
Wholesale marijuana product purchase data also demonstrates a huge discrepancy on category choice in Connecticut, especially in comparison to other recently launched recreational markets.
Leaflink, a marijuana wholesale technology platform, tracked wholesale volume in Connecticut via its online marketplace. The platform determined that an average store in the state bought roughly 400 product stock-keeping units, a figure that is significantly lower than those from its counterparts in Missouri and Maryland.
Data from Leaflink shows that in Missouri, where recreational sales launched in February, the average retailer purchased about 1,000 store-keeping units. In Maryland, where adult-use sales begun in July, the average dispensary in October purchased 1,200 store-keeping units.
Also impacting the situation is the fact that the vertically integrated market is dominated by businesses such as Green Thumb Industries Inc. (CSE: GTII) (OTCQX: GTBIF), Verano Holdings Corp and Curaleaf Holdings, which operate in multiple states.
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