Maine’s adult-use cannabis sales are at an all-time high.
Last month, the state’s 130 adult-use retailers reported 377,050 sales transactions totaling over $21.6 million, earning the state just over $2 million in sales tax revenue, according to data released Thursday from the Maine Office of Cannabis Policy.
June, July and August each set and then consecutively broke sales records for the fast-growing industry.
So far this year, the industry has reported about $140 million in sales and is on track to far surpass last year’s total of $158 million.
Monthly sales have come a long way from roughly $1.3 million in the industry’s first full month of operation, and have continued to break records on nearly a monthly basis.
“The summer sales numbers were quite strong, setting records, and showing that the cannabis industry in Maine is still growing,” said John Hudak, director of the Office of Cannabis Policy. “Our hope is that the summer numbers also indicate a trend that tourism is having an impact on the market, as tourism is a significant part of many other industries across the state.”
Cumulatively, retailers sold about $61 million worth of cannabis and cannabis products in June, July and August. That’s more money in three months than the $58 million sold in the entire first 12 months of operation.
When the market launched in October 2020, the industry struggled with limited supply and high costs. Now, with 130 stores, 66 manufacturing facilities, 89 cultivation sites and four testing labs, buyers are seeing more variety and lower prices.
The average price of smokable marijuana flower has been more than slashed in half from $16.68 per gram at market launch to $7.83 per gram as of August. The average joint contains between 0.32 and 0.5 grams of cannabis.
Smokable cannabis continues to account for the lion’s share of sales, capturing about 58% of the revenue in August, but the number and variety of concentrates and infused products like edibles and beverages also has expanded as the market has matured.
Hudak expects fall sales to stay strong, but said that they likely will not be record-setting numbers as tourism dips between summer and the start of ski season.
Summer sales have been strong, but are still substantially lower than those in the state’s prolific medical cannabis market. July and August numbers were not immediately available, but in June the medical industry reported $29 million in taxable sales, according to the Maine Revenue Service.
SATURATION A CONCERN
The adult-use industry’s growth trajectory may slow but it’s not likely to reverse course anytime soon – the state has another 90 stores, 51 manufacturing facilities, 56 cultivation sites and one additional lab in various stages of the approval process.
This makes it difficult to predict when the market may level out, Hudak said.
As more stores and facilities pop up – clustered among the roughly 10% of towns that have opted in for adult-use sales – existing growers and sellers are concerned about market saturation.
“Eventually some businesses will find it difficult to keep the doors open and the lights on as prices continue to fall and supply continues to grow,” Hudak said.
This is also a concern for the state’s medical market, which last year reported a “mass exodus” of caregivers, the industry term for medical cannabis providers. The Office of Cannabis Policy attributed the nearly 25% drop in caregivers to oversupply in the market.
“Those strong sales numbers can mask a reality,” Hudak said. “As oversaturation increases, the margins at which businesses operate get smaller and smaller and can eventually cause some real market challenges.”
Hudak said the potential for changing cannabis from Schedule I to Schedule III could bring some needed tax relief for businesses.
There also was an excise tax reform bill before the Legislature this year, and while supported, Hudak said stakeholders and legislators defeated it over a sales tax offset that was necessary to get it off the appropriations table.
“Businesses are feeling the sting,” he said. “It is our hope that in future sessions, the state Legislature can have a more productive and reality-based conversation about reforming excise tax in the adult use program.”
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