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Maine, Missouri See Supply Issues And Market Optimism As Cannabis Marketplaces Come Online

October saw the opening of several cannabis marketplaces in the United States.

· 11/13/2020 18:10

October saw the opening of several cannabis marketplaces in the United States.

Maine was the first to do so on Oct. 9 when its long-awaited adult use market came online. Missouri and Virginia followed suit on Oct. 17, with Virginia opening one hour earlier.

Virginia's market expects to be a lower generating marketplace, offering just edibles, oils and single-dose vape cartridges.

Maine's and Missouri's market openings are more in-line with other state markets. While the two states face some similar challenges, each shows signs of promise in the months and years ahead.

Related links: RegTalk: Maine's Adult Use Regulations Limit Industry's Access To Capital

Maine Sees Positivity Despite Supply Concerns

The opening of Maine's adult use market was delayed for four years — one of the longest waits a state has endured — due to legislative delays, infighting and the COVID-19 pandemic delayed.

Consumers and operators, alike, were frustrated. But the delays did not dampen market activity, nor did the pandemic. Dispensaries across the state combined to sell $100,000 on opening day, despite limited product availability due to cultivation licensing delays.

Certain stores reported offering just flower, pre-rolls and edibles when opening.

Kacey Morrissey, senior director of industry analytics for New Frontier Data, expects supply chain issues to remain for the first year.

Another issue stems from caregivers, the state's name for medical dispensaries, and larger operators.

On Oct. 21, two caregivers filed a federal lawsuit against seven adult use companies and Maine regulators.

The caregivers claim that license holders were from out of state. State regulations stipulate a license holder must have established residency and paid taxes for at least four years.

"A balance will eventually be struck between the current medical caretaker system, regulated medical dispensaries, and adult use retailers — as the state has put no license caps in place on adult use businesses," said Morrissey, noting that initial months will be rough.

Curaleaf Holdings Inc. (OTCQX:CURLF), meanwhile, is analyzing the market and how it can best serve consumer needs.

"We are excited about the evolution of a commercial adult-use market in Maine, and its ability to generate additional tax revenue and new job opportunities for the state," Curaleaf president Scott Reed says.

Related links: Missouri's Medical Marijuana Ambitions Have Begun

Missouri Sees Market Potential, Adult Use On The Horizon

Missouri saw its opening two years after approving medical laws. The day was a mix of optimism with limited products and just a few open stores.

Despite the early stage issues, Missouri appears poised to be a substantial market in time.

Patient enrollment was close to 70,000, according to New Frontier Data's Morrissey.

"The qualifying condition list is expansive allowing for physicians to recommend medical cannabis for any condition for which they think there might be a benefit," she said.

Sixty cultivators, 86 processors and 192 dispensaries received a license so far.

However, only a few cultivators have begun harvesting, resulting in the product shortage. Officials expect the deficit to last several months.

Setbacks aside, patients were ready to buy early on, with reports of long lines. Expectations project the market could reach annual revenues of $650 million by 2024.

"The excitement is there, and Missourians are ready for the many benefits and uses of cannabis," said Joe Pennington, CEO of Proper Cannabis. "With few stores open, people have to do with limited supply and longer lines, but week after week, the industry is making progress, and I suspect it will be a steady build up."

Pennington, whose two locations plan to open in 2021, sees adult use on the horizon.

There is a collaborative effort between state-advocates, social equity partners and licensees to deliver a viable ballot initiative in 2022, he explained. The group also plans to continue educating patients and elected officials on the matter.

"Missourians really do want to be a leading example in this business and I suspect the adult initiative will be done in the same manner," said Pennington.