Fear not—there’s still plenty of weed in Maryland
Maryland is looking pretty hazy, Leafly Nation, and we’re not talking about the weather. Over a month after beginning sales for adult use, the state of Old Line saw a huge surge in demand for cannabis flower, pre-rolls, edibles and vapes. Between July 1st and July 30th, according to data from the Maryland Cannabis Administration, sales totaled nearly $85 million, double the sales for the pure medical market for all of June — total sales for July 1st alone were over $4.5 million.
While medical patients appeared to have stocked up ahead of time, Maryland was in a unique position for a bud boom. Surrounded by states that have only medicinal uses or no legal cannabis whatsoever, do not have a holiday weekend, and have a low 9% cannabis sales tax, Maryland has to contend not only with local demand but also with an influx of foreigners and tourists would like to be part of the campaign. On day one, Leafly met a number of consumers who had crossed several state lines or just walked in off the street. The common denominator is that they wanted an accessible way to acquire quality cannabis and cannabis products.
… We sell our varieties every week and have stock for the next week right behind.
Rebecca Bronfein Raphael, Chief Revenue Officer, Curio
“We are seeing more consumers coming through the door and cross-border shopping and general curiosity about the different dosage forms continuing to increase. Flowers, vapes, pre-rolls and edibles remain the most popular product category,” said Rebecca Bronfein Raphael, Curio’s Chief Revenue Officer. “As far as our stock of flowers goes, we sell our varieties every week and have stock for the next week right behind them. Our thesis to open our additional canopy and ensure it is ready for the second half of 2023 was correct.”
No wonder bud is still the number one in sales – the Washington Post reported that dispensaries in Maryland sold over 19,500 pounds of cannabis in July, up from 8,000 in June. According to cannabis market data platform Headset, buds accounted for about 50% of Maryland dispensary sales in July, followed by vape pens. Prerolls saw the largest increase in sales over the month compared to medical-only data, up 172%. Some operators believe this is related to new consumers, many of whom may have never visited a pharmacy before, and want to sample the varieties and buy smaller quantities before deciding on an eighth.
Sales of edibles and flower also increased significantly (138% and 145%, respectively), while sales of concentrates, tinctures, and topicals appear to have declined. This is partly because of consumer tastes and partly because certain products, namely concentrates and fortified pre-rolls, are still reserved exclusively for medical patients.
Currently, there are only 18 licensed growers in Maryland capable of supporting a $1 billion state cannabis industry by 2025, but don’t worry. Farmers and manufacturers have been anticipating this increased demand for months and are adjusting their supply accordingly. The operators told Leafly back in June that they had been shelving additional inventory and ramping up operations for months, which has proven wise.
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Justin Garcia, compliance and public relations manager at SunMed Growers, the largest grower in Maryland, says her team had plans for adult use way back in 2015, when they received their license. They’ve increased their acreage several times over the years (nearly 300,000 square feet now) and established their processing arm, SunMed Labs, to produce a line of concentrates and, more recently, edibles. Garcia estimates they have product in about 70 pharmacies in Maryland at any given time.
“All our partners tell us it’s two to three times their retail price before adult use. That means more volume on their shelves and more volume that has to come out of our facility. “In the future, we would be able to keep up with two, three or four times the demand,” he says. “Our biggest limiting factor at this point is: how fast can we package it?”
Given the maturity of the Maryland medical market, supply wasn’t a major concern for operators who spoke to Leafly. Nearly 100 medical pharmacies in Maryland were able to switch their license type to adult use in time for day one, which explains the huge jump in sales compared to states like New Jersey, where there were 12 pharmacies, or New York, where there was only one. Multi-state operators like Curaleaf and TerrAscend, with experience tapping into markets in other states, said they’ve scaled operations accordingly.
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“Compared to a typical Saturday, we had a more than fivefold increase in sales that day. And in the first month so far we’ve doubled our sales; We have nearly tripled the number of customers we continue to welcome to the Maryland market,” said Dinesh Penugonda, VIP of the retail store at Curaleaf. “We have invested in both the capacity supply of our products and our facilities in the run-up to launch to ensure we are prepared for the increased demand.”
As a state, Maryland has some unusual boundaries, and geography has been shown to play a role in where consumers flock to. For example, at the Curio store in Baltimore County, jelly beans are in high demand, while at the sister store in Elkton, MD, flowers are at the top of the list. Chantelle Elsner, SVP of Commercial Operations at TerrAscend, tells Leafly that her Cumberland florist, near the West Virginia border, saw significant growth in flower sales from both adult consumers and medical patients in July, and a surge in purely medicinal products.
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“Our strategic approach to developing new states is to align our cultivation to meet market demand. Maryland is a more mature market; Consumers understand the product. During my time on site with the teams when we launched on July 1st, everyone was very knowledgeable about the products and form factors and very familiar with the pricing and range. Overall we have adjusted our offering to our demand and focused on new products such as concentrates or different types of pre-rolls to drive further penetration of the larger wholesale market.”
The biggest challenges, as many sources have reiterated to us, are the current emergency regulations’ restrictions on the marketing of cannabis and the differentiation of products and services that are still reserved exclusively for medical patients. For example, curbside pickup is still reserved exclusively for medical patients, as are dab products, high-potency edibles, and fortified pre-rolls. Marketing regulations are more conservative than before, and updated SOPs have introduced additional processing and packaging steps. If you’re seeing a drop in supply, it’s more due to supply chain compliance than a lack of inventory.
The Maryland Cannabis Administration will open applications for hundreds more licenses throughout the supply chain in September 2023, with specific criteria for social justice applicants, and Maryland’s current emergency cannabis regulations expire on June 30, 2024, giving regulators less than a year There is time to make changes. Elsner told Leafly that TerrAscend has compiled data to present with other operators to regulators and advocate for expanding adult access to consumer concentrates based on their successful efforts in New Jersey.
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Operators agree that Maryland’s transition has been rapid, and numbers promise continued industry growth and consistent access for customers and patients to their favorite products and strains. However, many also point out that a busy first month cannot reliably predict the rest of the year, nor how the influx of new dispensaries, growers, processors and micro-enterprises will impact the market in the years to come.
“We don’t want to use one month’s data as a crystal ball for the rest of the time,” Curio’s Raphael said.
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