Michigan’s has surging legal sales exceeding $473M YTD, but not without roadblocks
A senior official of Michigan’s Marijuana Regulatory Agency believes that the state has a market potential upwards of $3 billion. Executive director Andrew Brisbo made the comment at Benzinga’s virtual Cannabis Capital Conference, also noting that a key challenge facing the state’s nascent industry are municipalities that limit the number of operating dispensaries: "The consumer demand is there, but there's also only so far consumers will go to make their purchases."
July’s total sales hit a new high of $109.6M, and it was also the first month since adult-use sales launched in December 2019 where recreational sales surpassed medical sales, at $57.4M and $52.1M, respectively. YTD, Michigan’s total sales have topped $473M. Flower continues to be the most popular product type, with a majority market share of sales at 53% as of July’s data. Vape cartridges were at 20.8%, infused-edible products at 13.6%, and concentrates at 8.1%.
However, there has been a shortage of recreational wholesale cannabis as producers try to keep up with the exceptional demand. State regulators gave local municipalities the choice as to whether to allow licensed adult-use marijuana businesses to operate in their communities or not. Recent numbers indicate that 1,419 communities have opted out while 60 have opted in, on allowing licensed adult-use businesses. Michigan’s largest city, Detroit, has delayed permitting recreational sales so that the city can examine social equity options. Until more municipalities come online to allow recreational sales, there will be fewer cultivation companies operating, producing the aforementioned shortage and shifting higher costs onto consumers. As of July’s data, the mean retail price for an ounce of flower was $402.72, while on the medical side, the mean retail price was just $267.41 – a steep price differential.
Dutchie, a cannabis e-commerce company, announces $35M in Series B funding
Dutchie, a leading e-commerce platform within the cannabis industry, announced that it had raised another $35M in Series B funding, bringing the company’s total funding to $53M. Notably, Dutchie funding round attracted celebrity backers, including Snoop Dogg’s Casa Verde Capital, Kevin Durant’s Thirty Five Ventures, and Howard Schultz’s Thrive Capital.
According to Dutchie, they process 10% of all legal cannabis sales worldwide, power 25% of all legal dispensaries in the U.S. and Canada across 30 markets and 301 cities, process approximately 75,000 orders daily, and facilitates over $2.4B in annualized sales. The company has experienced a 700% increase in sales volume throughout the pandemic.
In an interview with GeekWire, CEO Ross Lipson said, ““We’re seeing adoption rates for online orders, curbside pickup, and delivery soaring through the roof with widespread ‘stay at home’ orders. Consumers are stocking up on cannabis like other non-perishable goods, and businesses have to offer alternative services to meet their needs.”
Lipson said, “We have spent three years building the largest online ordering service in cannabis and now is the time to take Dutchie to the next level. We will accelerate in every aspect, from building a world class team, to delivering the industry's best product, and continuing to push the boundaries with innovative and exciting ways to connect consumers and dispensaries.”
Marijuana vending machines in Colorado for contactless purchasing
In Colorado, a company called anna installed four marijuana vending machines at a Strawberry Fields dispensary. Customers there can purchase flower, edibles, and vape cartridges via a self-checkout system and are still required to show proper identification.
The CEO of anna, Matt Frost, told the Denver Post, “There are experienced cannabis customers who don’t necessarily need that one-on-one interaction with a budtender. They know what they want before they walk in, they’re ready to go in and out. By doing this we’re giving more time back to the people who do need hand-holding and want that education from a live person. With COVID and social distancing and contactless, definitely we have an appeal there, as well.” In the age of COVID, an even more contactless purchasing experience like a vending machine may soon become increasingly appealing to dispensaries.
