Legal weed is coming to Boston, opens door to entire U.S. East Coast
NEW YORK • There’s a new green monster in town: Legal recreational marijuana sales are about to hit the U.S. East Coast for the first time — a possible tipping point for the surging, multibilliondollar weed industry.
Cannabis becomes legal to sell to those 21 and over at licensed retail stores on July 1 across Massachusetts, the seventh state to create a legal recreational market for a drug still seen as illegal by the federal government. It’s expected to be big business in the state that is home to the Red Sox and Fenway’s famous green wall — not to mention college students at Harvard and elsewhere.
And while Massachusetts has been slow to issue the licences necessary to operate the stores, which may lead to early supply shortages from Boston to Worcester, the state’s market is expected to reach US$325 million this year and surge to US$1 billion by 2020, according to New Frontier Data, a cannabis research firm. Additionally, the money generated from taxing cannabis might prompt some East Coast neighbours to take the plunge into legalization.
New Jersey’s governor vowed to make recreational pot legal during his campaign, and there are also signs of a thaw in New York — a pair of states with big populations that will watching closely as Massachusetts joins Colorado, California and a handful other West Coast states in legalizing recreational cannabis sales.
“We think it’s hugely consequential — Massachusetts becomes an anchor market on the East Coast,” said John Kagia, an analyst at New Frontier. “Seeing the revenue generated will propel very robust discussions in the neighbouring states.”
Massachusetts will be poised to add another attraction for visitors and investors — the state is already a biotech hub and a tourist destination drawing millions of annual visits. For now, it’s possible that no stores will be licensed in time to start selling on Sunday, but as the paperwork falls into place, the market should be quick to grow, according to analysts.
The market for recreational marijuana has ballooned to more than US$5 billion since Colorado legalized the drug in 2012, according to New Frontier. When including medical marijuana, total U.S. sales are seen reaching US$11 billion this year, according to a report by Arcview Market Research and BDS Analytics.
Cowen & Co. estimates the legal market could hit US$75 billion by 2030, though that number assumes cannabis will become legal federally. With the drug legal for recreational use in only a few states, the illicit market remains hefty, worth an estimated US$27 billion.
Maine and Vermont permit cannabis possession, but haven’t moved to allow legal recreational sales.
The expansion has fuelled an investment boom that could accelerate as more states get on board. In April, President Donald Trump endorsed the idea of letting states decide how to regulate marijuana, removing a cloud that hung over the industry after Attorney-General Jeff Sessions rescinded an earlier Justice Department memo shielding recreational operations in states like Colorado from federal enforcement.
Matt Yee, 32, is in charge of the Massachusetts market for the cannabis company
BECOMES AN ANCHOR MARKET ON THE EAST COAST.
Green Thumb Industries, which operates medical marijuana stores across six states and has two recreational shops in Nevada.
The company is working to sign an agreement with the Massachusetts town of Amherst, where it operates a medical dispensary, and then will apply for a state licence to allow a retail location in the college town. He thinks the Green Thumb store will be open later this year.
“It’s been a little slow to move, but there’s high potential,” said Yee, who grew up nearby. “There’s a lot of eyes on us; we’re excited about it.”
Canada is preparing to legalize the drug nationally later this year.
Ottawa said this week it will impose strict regulations aimed at ensuring organized crime doesn’t infiltrate the recreational marijuana market once cannabis becomes legal in Canada on Oct. 17.
Overall, the regulations are aimed at allowing a “diverse, competitive, legal industry comprised of both large and small players while prescribing a high standard for safety and security and specific measures to prevent diversion of cannabis into or out of the regulated system,” said one official during a technical briefing on Wednesday.