CANNAINVESTOR Magazine Premier Issue April/May 2016 - Page 51

Robust medical marijuana markets Colorado medicinal cannabis retailers, which are regulated separately from adult-use businesses, grossed $402 million in 2015. Marijuana became legal for medical purposes in Colorado in 2001 and sales grew rela1vely steadily un1l adult-use sales began in 2014. At that 1me, monthly medical retail revenue began a decline culmina1ng with January 2015 being 14% below the same month one year earlier. But then medical sales rebounded, and December 2015 exceeded January 2015 by 39%. There is no wholesale excise tax on Colorado’s medical cannabis and this is reflected in the channel’s $6.81 average retail price per unit in 2015. The adult-use average retail was 63% higher at $11.08. Washington is in the process of phasing out medical-specific marijuana retailers; the state will complete that process in June 2016. Nevertheless, 2015 sales were significant. Based on data available through October 2015, BDS Analy1cs es1mates full-year medical marijuana sales in Washington of $96 million, s1ll 76% smaller than Colorado’s total. Gummie candies, nonexistent in Washington, dominate Colorado’s candy sales Dis1nc1ons in regula1ons have led to significant differences in products sold in Colorado and Washington. Both states sold about the same propor1on of cannabis-infused edible products in 2015—12% of all adult-use cannabis sold in Colorado and 10% in Washington. The differences emerge in the subcategories. Strict rules governing the types of edibles sold in Washington, which limit candies to avoid en1cing children, led manufacturers there to focus on 1nctures, infused foods such as baked goods and syrup, and other items including chocolates and beverages. Those categories accounted for 75% of Washington’s edible cannabis sales in 2015 but only 60% of Colorado’s, where the candy market is much more robust. Gummie candies flourish in Colorado’s less stringent regulatory environment, garnering $13M in 2015 adult-use sales and $5 million in the medical channel. Washington sold no actual gummie product. Hard candies took Colorado’s second share with $10M in adult use. Washington’s total candy sales amounted to less than $8M. Washington may be gemng the bener of the deal in terms of pricing. Its largest candy category in 2015, hard candies, had an average selling price of $23.74 per unit, while Colorado’s largest, gummies, brought in $19.72, on average. Among edibles, 1nctures commanded the highest prices in both states, selling for $26.69 per unit in Washington a nd $22.76 in Colorado. Sales are off to a good start in 2016. Total Colorado cannabis retail sales in January and February combined grew 32% over the same two months in 2015. Washington sales, available only for January adult use, remained about even with the Q4 2015 monthly average of $37 million, but greatly exceeded January 2015’s $10 million, when dispensaries were s1ll ramping up. ©2016 BDS Analy1cs Source: BDS AnalyMcs is the leading provider of market intelligence and ac1onable data in the cannabis industry, including retail sales at the state, channel, category, brand and product levels. Through monthly dispensary repor1ng, BDS provides 1mely, accurate informa1on at the most granular levels not available anywhere else. CONTACT: Dispensaries: Greg Shoenfeld 720-668-8946 greg@bdsanaly1cs.com Brands and Grows: Liz Stahura 303-641-4759 liz@bdsanaly1cs.com Corporate: Roy Bingham 727-482-2810 roy@bdsanaly1cs.com