Just a quicky … no charts, no graphs, just some concern over an unexpected event that I saw in the daily state sales data that were just posted by the WSLCB:
AVERAGE DAILY SALES OF STATE-LEGAL CANNABIS FELL IN WASHINGTON FOR THE FIRST TIME IN OCTOBER.
Yup. Average Daily Sales of Cannabis in the I-502 market hit only $1,978,210 in October (compared to $1,985,040 in September). This is for ALL sales (including wholesale and retail).
It is a little early for things to be flattening out and I suspect this is an anomaly … let’s hope this is driven by prices more than by volume.
When broken out by Business Type, Production grew over 63% (hello fall harvest!) from Sept to Oct, Processing about 2.4% and Retailing only grew 0.2% … does this, perhaps, foreshadow the “Oregon Tax Free Effect”? (e.g., OMG – is it actually a decrease in VOLUME!!!!?)
Stayed tuned to HI-Blog to find out.
Jim
No surprise here. It’s a developing industry. Really in its infancy. The complexities of even the Colorado market are not here yet; from the shear number of stores, to the types of products offered, to the change in cultural perceptions, etc., etc.. And even Colorado is not a very mature marketplace. No doubt Oregon played a role too and Washington may have to adjust again to regain some market share but that too is short term. I think it’ll take 10 years before the industry starts to stabilize in terms of growth.
Glad to hear your thoughts, Jason.
I generally don’t react well to feedback that takes the rough form of “great analysis that just confirms common sense that we all knew (or at least “I” knew) before-hand”.
Knowing something and quantifying it are different. Quantifying well tends to increase knowing. Knowing certainly improves quantifying. It’s best to do/have both.
No harm, no foul … but I will have a tendency to not respond to posts of that basic form on this blog. They neither help our knowing nor help our quantifying.
The Oregon effect was, I hope, a surprise to no-one (except, perhaps, to those that have recently purchased stores or ownership stakes in stores near our southern border).
Our market has it’s own complexities. Some are very similar to those being faced by the Colorado market (such as how the Feds still allege it to be illegal). Some are quite different.
Having 16 months of sales history for the State (and for some individual businesses) also gives us quite a bit of information with which to describe normative patterns of sales and volume uptake for, for example, a “typical store” or a “typical farmer”. That is typical for an emerging industry, but the lack of history actually adds a degree of focus and simplicity to analyzing and understanding what’s going on. It’s complex, but workable solutions to the early lives of similar markets have been found and are well understood. Having such analogies helps in understanding this market (e.g., it’s not really all that complex).
We have LOTS of products on the shelves in Washington now (hundreds, at last count … not even counting the THOUSANDS of strains that are being grown). Tremendous diversity of product – a diversity that will only increase as medical moves over to the light (be careful not to get burned, medical …. there is still opportunity to influence relevant rule-making).
I doubt it’ll take 10 years to stabilize. Other States coming on board and the Feds waking up from their apparently ignorant stupor, and interstate / international Cannabis commerce will all certainly shake things up when they come along.
In the meanwhile, more and more adult Washingtonians will experience what Cannabis actually is (both it’s good and it’s bad). I expect that this process of familiarization (and resultant “trial” for the adopters in the group) is already well underway … and will likely accelerate for awhile before it begins to slow down.
Of course, if the right Republican gets in as next President, and has the right Congress to back her things could change big time. In that case, I’d anticipate a rapid deceleration in taxable sales across the board.
We’ll see.
Jim