Marijuana weekly review: Legal cannabis sales on pace with alcohol, medical marijuana job postings surge, and teen use decreases
By Rick Schettino
Aug 27, 2018
RBC Capital Markets estimates that US marijuana sales are quickly catching up to those of beer and wine. The report estimates that legal sales alone could be worth $47 billion within a decade.
Analyst Nik Modi writes, "In this US, the legal cannabis category is set to grow at a 1 percent CAGR over the next decade to as much as $47 billion in annual sales (this compares to the current diaper category at $4 billion in sales). Driving the growth is recreational use of the product, particularly concentrates and edibles. Estimates already suggest that the US category alone is $50 billion, which compares to spirits $58 billion, wine $65 billion, and beer $117 billion."
The $50 billion estimate includes illegal sales, according to RBC. Total black market sales are unclear.
The marijuana job market outpaces the national average
Overall job growth in the medical marijuana sector is “outstripping the national average,” according to Joblift. The employment platform claims that Google searches for medical marijuana jobs increased by a 43 percent from the last half of 2017 through the first half of 2018 and a 24 percent increase in job postings during the first half of 2018 compared to the last half of 2017. At least 15 percent of job postings requiring highly skilled professionals such as physicians, nurses, pharmacists, according to the data.
Most of the sector’s growth is occurring in Northeastern states. Joblift’s report shows that Pennsylvania, Massachusetts, and New York each saw the most significant increases in medical marijuana job postings over the first half of 2018 compared to the prior six months. On the other coast, there was an 11 percent decrease in job postings during the same period. New York holds the potential for the most job growth in the medical cannabis industry, according to the report.
A new generation gap in the cannabis market
The Washington, D.C.-based National Council for Aging Care recently released its complete guide to medical marijuana for seniors. The report quotes a Washington Post survey which claims that 90 percent of respondents reported that medical marijuana helped their conditions. From 2006 to 2013, senior cannabis use rose by 250 percent. According to the report, seniors view cannabis as much more cost effective and safer than many prescription drugs, particularly opioids.
Meanwhile, According to a new state-funded health survey released last week, marijuana use among California middle and high school students continued to decline in 2016 and 2017. According to the 16th biennial California Healthy Kids Survey, only 4.2 percent of seventh graders reported ever using marijuana.
Also according to the report, there has been a marked decline in teen marijuana use over the past four years. Cannabis use among 7th-grade students dropped from 10 percent to 7.9 with similar declines were found among students in grades nine and 11. The survey contradicts claims that legalization leads to increased marijuana use among children.
Cannabis across the states
Wells Fargo recently decided to drop an account connected to a political candidate in Florida who supports medical marijuana. The bank ordered Democratic candidate for Florida agriculture commissioner, Nikki Fried, a former lobbyist for the marijuana industry who accepted campaign contributions from companies in the sector to take her campaign account funds elsewhere.
When pressed for their reasoning behind the action, Wells Fargo officials stated that “as a U.S. bank, Wells Fargo must comply with this law even if state laws differ. Therefore, it is Wells Fargo's policy not to knowingly bank or provide services to marijuana businesses or for activities related to those businesses.”
An initiative to legalize marijuana for recreational purposes is on the ballot inMichigan this November. The bill has widespread support in the polls and support from the Democratic nominee for Attorney General, and many expect it to pass.
If passed, the Michigan Regulation and Taxation of Marihuana Act would allow residents 21 and older to legally purchase marijuana for recreational use. Individuals could carry up to 2.5 ounces and have 10 ounces at their home. Also, they could grow up to 12 plants at home. Municipalities would have the right to ban businesses related to distribution within their respective limits. And there would be a 10 percent tax on marijuana products sold in addition to the state’s 6 percent sales tax.
Out in Colorado, Denver’s licensing director signed off on the city’s second social consumption license. Vape and Play plans to open the 21-and-over social lounge and entertainment venue in November or sooner. Customers will have to bring their own marijuana per the rules of Denver’s 2016 voter-passed Initiative 300. Co-owner Taylor Rosean says the lounge will be centered around a “multi-station, saloon-style vape bar.”
Massachusetts’ Cannabis Control Commission has issued provisional licenses to two laboratories, Salem’s CDX Analytics, LLC and MCR Labs, LLC in Framingham. The state has now signed off on provisional licenses for growing, testing, and selling. Both labs currently test medical marijuana, but state laws require them also to procure a license to test the drug for recreational use.
Marijuana by the numbers
MedMen Enterprises (NASDAQOTH:MMNFF) recently reported revenue per square foot of $6,541 at its seven cannabis stores operating in California. That figure surpasses both Apple’s and Tiffany’s retail stores. The company reported that its seven locations in operation throughout the entire quarter saw 94,000 new customers but and 130,000 returning customers.
Although MedMen's seven stores make up less than 2 percent of the total number of retail marijuana locations in the state, they generated around 6 percent of total legal sales. MedMen's stores generate roughly three times more revenue on average than stores operated by rivals.
According to a recent survey by MD Analytics, 32 percent of doctors surveyed support the use of medical marijuana, while 47 percent who responded negatively cited concerns over addiction, misuse, and effects on the brain. The company put together their findings in the infographic below: