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How Much Cannabis Does Massachusetts Need?
July 31, 2020

This is the second article in a two-part series. Click for part 1

Now that this issue of cannabis prices in Massachusetts has been covered, it’s time to get onto the main question: how much cannabis does Massachusetts really need?  

Alex Mazin, the CEO of Bud’s Goods & Provisions, posed it, and also stated he believes when Massachusetts reaches its full potential it will be a $2 billion market annually in the cannabis industry. 

Obviously this will be purely a projection, but in doing so we might see potential for the Massachusetts market, which only has one full year of legal sales so far. In making this projection, I’ll be using Colorado’s yearly cannabis sales reports and comparing populations, the tourism effect, and numbers of users. 

So come on a journey with me while I attempt math. 

Comparing Populations 

With a population of 6.893 million, Massachusetts cannabis shops reported $420 million in sales in 2019, the first full year of legal, adult-use sales.  

Colorado, with a population of 5.759 million, reported $683 million in sales in its first full year in 2014. 

So even though Massachusetts has almost 20% more people, Colorado saw significantly more in sales during its first year, almost 63% more. 

Year by year, Colorado’s sales have looked like this, including both medical and recreational cannabis: 

  • 2014: $683,523,739
  • 2015: $995,591,255
  • 2016: $1,307,203,473
  • 2017: $1,507,702,219
  • 2018: $1,545,691,080
  • 2019: $1,747,990,628

Looking at these numbers, we can see that Colorado saw a jump of more than 155% from 2014 to 2019, a six year span. If Massachusetts sees a similar jump like that, it’ll be looking at $1.071 billion in total sales in 2023. Of course, that’s ignoring the impact of the COVID-19 pandemic, which will certainly suppress growth for at least a year. 

But it’s fair to say the Massachusetts market started slower than Colorado, so this might not be the best comparison. After all, Colorado had a firmly established medical market by the time adult-use came around. 

If we were just looking at population, with Colorado reporting sales of $1.747 billion in 2019, and Massachusetts having a population of almost 20% more, we could assume that if Massachusetts were in its cannabis-selling heyday, it would have sold $2.096 billion of product. 

But it’s more nuanced than that. 

Tourism Impact 

Because Colorado was the first state in the nation to begin selling legalized recreational cannabis, its sales numbers are larger in part due to cannabis tourism. Cannabis tourism has become a boon for Colorado, with 25% of tourists to the state between 2013 and 2018 citing cannabis as a reason.  

Colorado continues to see cannabis tourism prop up its sales numbers, as the already established market makes for a buzzy get-away weekend for many people. A study conducted estimated that visitors in 2017 purchased 19 metric tons of cannabis, whereas Colorado adults purchased 190 metric tons. So visitors account for approximately 9% of total sales.  

Yes, as the first state on the East Coast to legalize recreational cannabis with accessible dispensaries, Massachusetts is seeing cannabis tourism. But without firm numbers of how much tourism contributes to sales totals, we have to work without it for this projection. As cannabis tourism gains more of a foothold in Massachusetts, sales numbers will obviously jump with it. 

Number of In-State Users 

Sure, Colorado may have the tourism numbers, but Massachusetts has something else: a lot of people who like to smoke a bowl.  

According to a survey done in 2018, 21% of Massachusetts adults had used cannabis in the previous 30 days. A survey in Colorado in 2017 reported 15.5% of adults had used cannabis. So if we adjusted the populations based on the number of people who use cannabis, we can see that 1.447 million Bay Staters use cannabis compared to 892,645 Coloradans.  

So Massachusetts has just over 62% more cannabis users than Colorado. That should help give them a boost to the $2 billion mark.  

Is $2 Billion Realistic? 

Using 2019 sales numbers with adjusted populations due to resident users, and taking away 9% of Colorado’s sales because of tourists (it would be difficult to assume how much Massachusetts makes from tourists), we’re left with potential sales numbers for Massachusetts of $2.576 billion. 

So it seems likely that Massachusetts will reach $2 billion. Of course, those potential sales numbers conjured up were primarily the results of a vibrant legal market from Colorado. Massachusetts will have to do a lot of things right to reach that $2 billion mark in approximately year 7 or 8—giving an extra year or two because Colorado started faster, both with medical and more recreational stores open the first year.   

So How Much Cannabis Are We Talking About? 

To make a simple projection of how much bud Massachusetts needs, it would be best to just divide the $2.576 billion projection by the average cost of an eighth. But as noted in Part 1 of this article, it wouldn’t make sense to use current Massachusetts prices—the state is unlikely to reach that sales goal with the current pricing. 

So using the current Colorado average of $30 an eighth, Massachusetts would need 85.896 million eighths, or 671,064 pounds of cannabis. That’s some serious green. Better get growing. 

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