Cannabis Dispensary Market

Part
01
of two
Part
01

Market Size - Cannabis Dispensary Market: United States

In 2018, the market size of licensed cannabis dispensary industry in the US stood at $10 billion; further, it is projected to reach a valuation of more than $30 billion by 2024, registering a CAGR of 24%. In 2018, the estimated number of licensed cannabis dispensaries operating in the US was 3,229, registering a YoY growth of 25%.


MARKET SIZE OF CANNABIS DISPENSARY SALES IN THE US

  • According to Marijuana Business Daily, the total retail sales of cannabis in the US will reach about $12 billion in 2019, registering a growth of 35% over 2018.
  • In 2019, the retail sales of medical marijuana will generate a revenue of more than $4.8 billion, while that of recreational marijuana will be about $8 billion.
  • According to a recent report by Arcview Market Research and BDS Analytics, the global licensed dispensary sales of cannabis will reach $40.6 billion by 2024, registering a CAGR of 24.5%. Additionally, the US will account for about $30 billion or 73% of the global cannabis dispensing market in 2024.
  • It is projected that by 2024, the retail dispensing sales of legal recreational cannabis will cross $26.7 billion, whereas the revenue generated from the sales of medical cannabis will reach $13.9 billion.
  • The retail sales of THC containing products from licensed dispensaries across the US will feature growth of nearly 300%, i.e., from $8.4 billion in 2018 to more than $24.7 billion in 2024.
  • In 2017, the cannabis industry in the US employed a workforce of 121,000 full-time workers and was projected to employ over 291,500 workers by 2021, registering a CAGR of 19.23%.
  • As on September 2018, there were about 3,229 licensed cannabis dispensaries in the US, up by 25% from 2,590 licensed dispensaries in 2017.


ANNUAL GROWTH (%) OF CANNABIS SALES ACROSS LICENSED DISPENSARIES IN THE US

  • 2016-$6.6 billion
  • 2017-$8.6 billion (30.3%)
  • 2018-$10.5 billion (22.09%)
  • 2019-$13.7 billion (37%)
  • 2020-$19 billion (38.7%)
  • 2021-$23.5 billion (23.7%)
  • 2022-$27.4 billion (16.6%)
  • 2023-$30.4 billion (10.95%)


DISTRIBUTION OF CANNABIS DISPENSARIES IN THE US

  • California: 261 recreational dispensaries and medical dispensaries.
  • Nevada: 61 recreational dispensaries and medical dispensaries.
  • Alaska: 93 recreational dispensaries and medical dispensaries.
  • Oregon: 560+ recreational dispensaries and medical dispensaries.
  • Washington: 103 recreational dispensaries and medical dispensaries.
  • Colorado: 520 recreational dispensaries and medical dispensaries.
  • Massachusetts: 19 recreational dispensaries and medical dispensaries.
  • Maine: 8 medical dispensaries.
  • Arizona: 100+ medical dispensaries.
  • New Mexico: 68 medical dispensaries.
  • Montana: 50+ medical dispensaries.
  • Minnesota: 8 medical dispensaries.
  • Michigan: 100+ medical dispensaries.
  • Illinois: 53 medical dispensaries.
  • Florida: 27 medical dispensaries.
  • Pennsylvania: 6 medical dispensaries.
  • Maryland: 22 medical dispensaries.
  • Delaware: 2 medical dispensaries.
  • New Jersey: 5 medical dispensaries.
  • New York: 19 medical dispensaries.
  • Vermont: 4 medical dispensaries.
  • New Hampshire: 4 medical dispensaries.
  • Connecticut: 9 medical dispensaries.
  • Rhode Island: 3 medical dispensaries.
  • Washington DC: 8 medical dispensaries.


TOP CANNABIS DISPENSARIES

  • Harvest Health & Recreation is a multi-state cannabis dispensary operating 142 retail stores across 17 states in the US. In 2019, the company signed an agreement with the Asian American Trade Associations Council (AATAC) to offer its branded CBD products across 10,000 gas stations and convenience stores in the US.
  • Green Thumb Industries operate about 89 CBD dispensaries across 12 states in the US. The company operates under the brand of Rise and Essence retail stores.
  • Acreage Holdings has 88 licensed stores operating across 20 states in the US. The company was recently acquired by Canopy Growth for $3.4 billion.
  • MedMen Enterprises has 86 licensed stores operating across 12 states in the US. The company plans to open 30 additional stores in Florida.
  • Curaleaf Holdings has nearly 45 licensed stores across 12 states in the US. The company plans to increase the number of dispensaries to 70 by the year-end.
Part
02
of two
Part
02

Market Size - Cannabis Dispensary Market: Global

The estimated market size of the cannabis dispensary market globally in terms of revenue would be roughly $4.25 billion in terms of revenue. There are around 1418 dispensaries.

Cannabis Dispensary Market Growth Figures

  • A regulated dispensary averages about $3 million per year in revenue.
  • The annual operating costs for a regulated dispensary average about $1.92 million annually.
  • The U.S. accounts for 90% of the global marijuana market.
  • The United States is where the most demand and highest sales are, making it the ideal place for small dispensaries to take root and thrive.
  • In 2017 the worldwide legal marijuana trade grew by 37% and was worth $9.5 billion. At $8.5 billion, the U.S. accounted for 90% of the trade. At $0.6 billion Canadas 2017 share was 6%. The rest of the world combined made up the remaining 4%.
  • According to the Humboldt Institute for Interdisciplinary Marijuana Research, "Since marijuana laws in several states have changed in recent years, the online listings of marijuana dispensaries in certain states are unreliable".
  • The online listings stated that there are 2,174 dispensaries in the US; however, the research revealed that the number of dispensaries which are active in the US is only 815 out of the listed (or 37 percent of the listings).
  • Based on a Statista report, a total of 1736 marijuana dispensaries are currently operating in the US.
  • The startup cost for a regulated cannabis dispensary is approximately $775,000.

Research Strategy

In order the find the statistics for the size and growth of the cannabis dispensary market globally, we first looked through market research reports such as Global NewsWire, Euromonitor, IBISWorld, PR News Wire and others. These sources could only provide the market size of medical marijuana, worldwide legal marijuana spending, global cannabis market, and other information on cannabis market. But no information was found in relation to the size and growth of the cannabis dispensary market globally.

Next, we decided to search through specific sources that publish marijuana/cannabis related articles and blogs as well other credible sources and were able to find some relevant statistics related to cannabis dispensary market including the annual revenue generated by each marijuana dispensary in the US and that the US accounts for 90% of the global marijuana market. These statistics were useful for the US market but not for the global cannabis market. Some sources we searched through include Marijuana SEO, Fit Smalll Business, Forbes, along with others.

We then decided to find the total number of dispensaries worldwide or in the US, hoping that this would be helpful while performing the triangulation of the data. We looked through various sources including statistical databases, reports, media articles, blogs and others. Through this search, we were able to find one Statista report which contained the information on the number of marijuana dispensaries in each of the US states but the data was behind paywalls and therefore, could not be accessed. Another article by HighTimes provided the data for the number of marijuana dispensaries in each state of the US and the total number in the US based on a research conducted by the Humboldt Institute for Interdisciplinary Marijuana. No information on the total number or the market size & growth of global cannabis dispensary market could be found.

Due to the absence of any precomplied statistics for the size and growth of the cannabis dispensary market globally, we decided to triangulate the figures using the US market data found in our research. And, as we know that the US accounts for 90% of the global marijuana market. Consequently, we were able to triangulate the global data for the size and growth of the cannabis dispensary market as well as the number of cannabis dispensaries.

Therefore, after extensive search, we have established that there are no publicly accessible reports or article which provide the information on the size and growth of the cannabis dispensary market globally. In order to provide some insight into the global cannabis dispensary market, we have used the US data to calculate the market size in terms of revenue and no. And, as the US accounts for 90% of the global market, we think that our estimation would be similar to the actual global data.

Below we have provided the details of our calculations.

Calculations

  • A regulated dispensary averages about $3 million per year in revenue.
  • The U.S. accounts for 90% of the global marijuana market.
  • In 2017 the worldwide legal marijuana trade grew by 37% and was worth $9.5 billion. At $8.5 billion, the U.S. accounted for 90% of it. At $0.6 billion Canadas 2017 share was 6%. The rest of the world combined made up the remaining 4%.

  • METHOD 1

    According to the Humboldt Institute for Interdisciplinary Marijuana Research, the total number of active dispensaries in the US = 815. However, the total number of dispensaries listed is 2,174. So, the total number of active marijuana dispensaries worldwide would be 905.55 or 906 approximately.

    The annual revenue of a marijuana dispensary = $3 million. So, the total revenue from 906 marijuana dispensaries would be = $3 million x 906 = $2,718 million or $2.718 billion. Therefore, the market size for marijuana dispensaries would be roughly about $2.718 billion globally.

    METHOD 2

    Based on Statista, A total of 1736 marijuana dispensaries are there in the US including each of its states. So, the total number of active marijuana dispensaries worldwide would be = 1928.88 OR 1929.

    The annual revenue of a marijuana dispensary = $3 million. So, the total revenue from 1929 marijuana dispensaries would be = $3 million x 1929 = $5,787 million or $5.787 billion. Thus, the market size for marijuana dispensaries would be roughly about $5.787 billion globally.

    CONCLUSION

    Based on the data obtained from above two methods, we took average to provide the estimated market size of the marijuana dispensaries globally.

    The market size of the cannabis dispensary market globally would be = (906 + 1929)/2 = 1417.5 or 1418 dispensaries approx.
    And the market size in terms of revenue would be = ($2.718 billion + $5.787 billion)/ 2 = $4.25 billion approx.

    Therefore, the estimated market size of the cannabis dispensary market globally in terms of revenue would be roughly about $4.25 billion and in terms of revenue, the size would be roughly about 1418 dispensaries.

    Sources
    Sources

    From Part 01
    Quotes
    • "Retail sales of medical and recreational cannabis in the United States are on pace to eclipse $12 billion by the end of 2019 – an increase of roughly 35% over 2018 – and could rise as high as $30 billion by 2023."
    • "In 2019, new medical markets, including Florida, Maryland, Ohio, Oklahoma and Pennsylvania, saw strong patient demand, broad lists of qualifying conditions and adequate access to dispensaries propel sales beyond initial expectations."
    • "By 2023, we project total retail marijuana sales in the United States will reach between $25 billion and $30 billion annually – more than a threefold increase from estimated annual sales in 2018."
    Quotes
    • "In the 2019 "State of the Legal Cannabis Markets" report from Arcview Market Research and BDS Analytics, which was released last week, the duo calls for global cannabis sales in licensed dispensaries to rise from $10.9 billion in 2018 to $40.6 billion by 2024. That's a cool compound annual growth rate of more than 24%, and it's certainly enough to get Wall Street and investors excited about marijuana stocks."
    • "But at the center of this excitement is the United States, which projects to generate nearly three-quarters of the $40.6 billion to be collected in 2024. A combination of ongoing marijuana legalizations (both medical and recreational), organic growth within existing markets, and the rise of cannabidiol (CBD), the nonpsychoactive cannabinoid best known for its perceived medical benefits, are all reasons that the U.S. cannabis market is expected to thrive."
    • "Harvest Health & Recreation: 142 licenses: The kingpin of all multistate dispensary operators in the U.S. currently looks to be Harvest Health & Recreation (NASDAQOTH:HRVSF), which has more than 230 facility licenses on a pro forma basis (i.e., if all of its pending acquisitions were to close). Of these facilities, 142 are for retail licenses spanning 17 states."
    • "Green Thumb Industries: 89 licenses: Although Green Thumb Industries (NASDAQOTH:GTBIF) is projected to be a major player, you certainly don't hear much about the company, which operates its stores under the Rise or Essence name. Currently, Green Thumb has licenses to open up to 89 retail locations, with a presence in one dozen states and 23 open Rise-branded stores."
    • "Acreage Holdings: 88 licenses: In a tight race for the No. 2 spot, Acreage Holdings (NASDAQOTH:ACRGF) comes in third with 88 retail licenses, just one behind GTI. However, Acreage does lead all multistate dispensary operators on the basis of state presence. It has retail licenses and an aggregate of 1.2 million square feet of production facilities or processing sites in 20 U.S. states on a pro forma basis."
    • "MedMen Enterprises: 86 licenses: Slotting in fourth but easily within striking distance for the No. 2 spot is upscale cannabis chain MedMen Enterprises (NASDAQOTH:MMNFF), which is on a mission to normalize the cannabis-buying experience. On a pro forma basis, MedMen has licenses for 86 stores in 12 states, with 37 stores currently open (again, on a pro forma basis)."
    Quotes
    • "For those of you keeping score at home, this works out to a compound annual growth rate of 28.2% over a decade and 24.5% over the six-year period between the end of 2018 and the end of 2024."
    • "Arcview and BDS Analytics also offer year-by-year breakdowns of global medical and recreational sales. After adult-use revenue hit $6.1 billion in 2018, to go along with $4.8 billion in medical marijuana sales, the duo will be looking for recreational revenue to expand to $26.7 billion by 2024, with an accompanying $13.9 billion in medical weed sales. "
    • "Additionally, we should see the bulk of this $40.6 billion in sales generated in North America. Even though spending outside of North America (i.e., Europe, Latin America, Asia Pacific, and the rest of the world) will skyrocket from $517 million in 2018 to an estimated $5.4 billion by 2024, Canada's nearly $4.8 billion in sales and the United States' nearly $30 billion in sales will account for the bulk of global cannabis revenue in 2024."
    • "First of all, you'll note that sales of tetrahydrocannabinol (THC)-containing products in licensed U.S. dispensaries will almost triple from $8.6 billion in 2018 to $24.7 billion in 2024. THC is the psychoactive cannabinoid that gets users high. Although we've been hearing a lot about cannabidiol (CBD), the nonpsychoactive cannabinoid that's best known for its perceived medical benefit, it's important to recognize that an estimated 55% of 2024 sales will still be based on buzzy THC products."
    Quotes
    • "Almost every vertically integrated dispensary -- i.e., a dispensary that completely controls its supply chain, including cultivation and processing -- proclaims themselves to be the nation's largest or best. "
    • "If the checkered flag were to wave right now, Curaleaf would have the nation's largest presence with 43 open locations, 23 of which are in Florida's booming medical marijuana market. Upscale dispensary MedMen would be second with 32 locations, Harvest Health third with 30, and Trulieve Cannabis fourth with 27. It's worth noting that Trulieve has 26 of its 27 currently open locations in the Sunshine State, too."
    Quotes
    • "The online listings appear to be inaccurate. We only found 815 out of the listed 2,174 dispensaries were active. This is 37 percent of the listings,” Erick Eschker, co-director of the Humboldt Institute for Interdisciplinary Marijuana Research stated."
    Quotes
    • "In 2018, total cannabis spending at U.S. dispensaries including medical and retail purchases reached $10.5 billion, according to cannabis research firm BDS Analytics. That’s up from $8.6 billion in 2017 and $6.6 billion in 2016. The past year is also the first time U.S. recreational cannabis sales outperformed medical sales."
    • "This year, the direct industry is responsible for the employment of 121,000 full-time U.S. workers and 50,000 indirect full-time workers, up from 89,500 direct full-time workers in 2016. That number is expected to reach 291,500 direct full-time jobs by 2021, for a total employment impact of around 414,000."
    • "As of February, Colorado had 550 active retail marijuana licenses. California currently has 625 licensed retail locations, and Oregon has 606. Together, the three states alone rival the 1,981 U.S. Home Depot stores open for business as of Q3 2018."
    Quotes
    • "In the graph below, we show the change in the number of active medicinal and recreational licenses nationwide. There’s been a gentle growth curve with an upward trend. The number of licenses issued has grown 25% since the start of the year from 2,590 to 3,229. Keep in mind that these numbers include stores that may have both a medicinal and an adult license."
    • "The growth in dispensaries and retailers came from California, Colorado, Florida, and Oregon – they accounted for 544 or 85% of the added licenses so far this year. Not surprisingly three of these states have active adult use markets."
    • "The biggest impact has been California as the state accounted for 52% of the almost 639 new licenses nationwide. "
    Quotes
    • "The illegal cannabis market in the United States is estimated to be more than $45 billion annually. (We estimate that the 2017 U.S. state-legal cannabis market was $8.0 billion.) If federal legalization occurs, we believe that the legal market could be more than two times the size of the current illegal market, ultimately exceeding $100 billion annually."