Legal pot sales are booming at 1-year mark
Regulator: Time will tell if growth will continue
PROVIDENCE – As the first anniversary of legalized recreational pot approaches, state records show a steady monthly increase in sales, with October’s $7 million in adult-use purchases just below September’s recordsetting $7.1 million.
Meanwhile, the monthly sale of medical marijuana to licensed patients – who pay 13% less in taxes – predictably fell during the last 11 months, from $3.9 million last December, when recreational sales began, to a record low of $2.3 million in October.
Combining the two categories, Rhode Island’s seven marijuana dispensaries sold in October a total of $9,430,642 in cannabis products. That figure, from the most recent data of the Office of Cannabis Regulation, was slightly below the record set in September of $9,633,352.
So, what do the numbers signal for Rhode Island’s expanding marijuana market?
“I think time will tell,” said Erica Ferrelli, chief of strategic planning, monitoring and evaluation for the cannabis office. “I think the numbers are good. They are going up every month, if not staying at a nice level over the past five months. I think it’s a little too early to double down on whether the numbers will continue to increase. They seem to have leveled off, so we might have hit a saturation point. I think we will be able to tell more over time.”
How much legal pot has sold in Rhode Island so far?
According to the state’s website, $34.3 million worth of recreational retail marijuana has sold in Rhode Island since retail sales began last December. That number does not include sales for November, nor does it include medical marijuana sales, which are counted separately. Adding in medical marijuana sales, total retail marijuana sales in Rhode Island top $95 million.
How have recreational sales affected the medical marijuana program?
The decline in medical marijuana patients over the year has been “drastic,” Ferrelli said, but not unexpected; other states saw similar declines when they transitioned like Rhode Island from a medical marijuana market only to one that includes recreational sales.
Last December, 15,062 active patients bought marijuana from Rhode Island dispensaries. By October that number had fallen to 10,377.
Many patients, Ferrelli said, “just find it easier to transition to the adultuse market" and pay a higher tax in order to avoid "the burden of finding a doctor, getting them to sign you into the program, which is still pretty difficult, pay for an appointment and get yourself there, which for some patients might be quite the hassle.”
Did ban on advertising hurt pot sales in first half of 2023?
Sales of recreational cannabis in 2023 could have been higher, some dispensary officials say, had they not been blocked from advertising for the first half of the year.
Rhode Island lawmakers established the marijuana advertising ban more than a decade ago when they created the state’s medical program. But licensed cultivators and newly opening dispensaries argued the ban was unfair, since Massachusetts pot stores were immune from the prohibition and in fact were hanging highway billboards over Rhode Island’s roads.
In June, Gov. Dan McKee signed new legislation lifting the ban.
“The ban on advertising really hurt us,” said Mallory Sampson, the financial controller at Aura of Rhode Island, a dispensary in Central Falls, which opened before the Dec. 1 start of recreational sales.
“People really didn’t know where we were,” said Sampson. “Once that [ban] was lifted, things really started to skyrocket.”
The lifting of the advertising ban apparently also helped the state’s licensed cultivators, as sales improved at the dispensaries they supply.
Between December and October, the sale of marijuana products from the state’s 60 or so licensed cultivators to the seven dispensaries selling their products increased more than 210%, said Ferrelli.
In December those dispensaries sold $1,139,992 worth of marijuana products to the dispensaries. By October that number was $3,547,027.
“So that’s all of our local cultivators – small businesses continuing to see a demand for their product. The data shows their products are definitely in demand, and the sales aren’t decreasing in any means, which I think is a great highlight for this industry.”
Regional glut of marijuana is keeping prices low
Much of the marijuana being sold in Rhode Island today is at favorable prices.
With increased production here and an oversaturated number of stores in neighboring Massachusetts, a glut of marijuana exists regionally, industry experts say, and it’s a race to the bottom for the lowest price.
Rhode Island’s new Cannabis Control Commission is expected next year to consider licensing another 24 marijuana dispensaries around the state, although Chairwoman Kimberly Ahern has said that can’t start until regulations on how that process will proceed are finalized.
In July she told The Journal that a lottery-type selection system such as the one used to pick the most recent dispensary licensees might not be the best way this time around.
“So that’s all of our local cultivators – small businesses continuing to see a demand for their product. The data shows their products are definitely in demand, and the sales aren’t decreasing in any means, which I think is a great highlight for this industry.”
Erica Ferrelli Chief of strategic planning, monitoring and evaluation for the cannabis office