(Editor’s note: Week in Review appears a day early because MJBizDaily will be closed for the July Fourth holiday.)
Medical and recreational cannabis sales in the United States are on track to exceed $15 billion this year, a jump of 40% over 2019, according to the new Marijuana Business Factbook.
Moreover, total U.S. sales could reach as high as $37 billion by 2024.
MJBizDaily takeaway: The projections come with a big, two-pronged caveat: The coronavirus pandemic and the recession.
Cannabis spending has been robust in markets that aren’t tourist-dependent.
But strong sales activity in those markets also has come at a time when unemployed workers have been receiving an additional $600 per week in benefits.
It’s unclear what will happen if those benefits aren’t extended past the end of July and the recession and coronavirus crisis linger.
That will be the test of whether marijuana is truly recession-proof.
Illinois adult-use licensing remains on hold
Illinois has delayed issuing 80-plus craft cultivation and infuser permits for its nascent adult-use market, with no clear signal when the licenses might be granted.
All told, the state has put on hold 75 retail licenses, 40 craft cultivation permits, 40 infuser licenses and an uncapped number of transporter licenses.
MJBizDaily takeaway: The delays caused by the coronavirus have benefited existing cannabis operators. They continue to experience strong demand in a market that launched Jan. 1.
Monthly sales have consistently hit around $40 million, with May reaching a record $44.3 million.
The state is limiting retail licenses, which should bode well for new entrants who manage to secure a permit.
On the flip side, many applicants have spent tens of thousands of dollars on real estate and other expenses while waiting to win a license.
Moreover, lingering delays could make it more difficult for new licensees to win market share from current operators, which are becoming more entrenched.
New Jersey linchpin to East Coast legalization?
Not long ago, New Jersey and New York were in a heated race to see which state would legalize recreational marijuana first.
But, at least right now, all eyes are on New Jersey, which has an adult-use initiative on the November ballot.
MJBizDaily takeaway: An expected nod for legalization by New Jersey voters will put a tremendous amount of pressure on budget-strapped New York to follow suit – or lose out on revenues.
Moreover, a yes vote in New Jersey could trigger a ripple effect along the East Coast.
Adult-use legalization is seen as virtually inevitable from Connecticut to Pennsylvania to Maryland. It’s just a question of when.
Dixie Brands joins growing chorus
Denver-based marijuana edibles maker Dixie Brands is changing its name, saying that the recent national conversation about racial injustice has caused the company to consider how its moniker could be causing pain to the Black community.
The company hasn’t come up with a new name yet. But the edibles maker said it wants to separate itself from the historic context of the word “Dixie” and to “stand shoulder to shoulder with the Black community.”
MJBizDaily takeaway: The Denver-based company joins a growing number of mainstream food companies that are moving on from racial stereotypes such as Aunt Jemima (pancake syrup), Eskimo Pie (ice cream) and Uncle Ben’s (rice).
What remains to be seen is what substantive changes occur in the workplace and C-suites.
Cannabis Black executives recently talked with Marijuana Business Daily about the barriers posed by racism in the industry.
Another Canadian cannabis firm reels in international footprint
Toronto-based Auxly Cannabis Group decided to forgo planting for the 2020-21 growing season at its operation in Uruguay, citing a slower-than-anticipated pace of marijuana-specific regulatory development in Latin America. Job cuts will affect about a dozen people.
MJBizDaily takeaway: Auxly joins a growing list of Canadian companies backtracking on their international ambitions.
Slow regulatory development has often been cited as a reason by large producers for their poor financial performance in international markets. Oftentimes, however, those firms expanded too far and too quickly – and without a clear picture of near-term revenue opportunities.
When operating in global cannabis markets, it pays to be conservative.
Jeff Smith can be reached at [email protected]
International editor Matt Lamers contributed to this report.