Declining prices and out-of-state competition hurt the state’s industry.
This story was republished with permission by Crain’s Chicago and written by John Pletz.
Illinois marijuana sales growth flattened last month for the first time since the state legalized recreational cannabis in 2020, hurt by declining prices and out-of-state competition.
April sales totaled $132 million, compared with $131.8 million in same period a year earlier, according to the Illinois Department of Financial & Professional Regulation.
The rate of year-over-year revenue growth in Illinois has been declining steadily for more than a year, as pricing has come under pressure across the industry and the number of new stores has stalled.
The number of marijuana products sold in the state during April was up 9% from a year earlier, roughly in line with the growth rate in March. Product sales growth, however, also has decelerated from double-digit rates seen through most of last year.
Pricing declines have occurred across the industry, as consumers have felt the squeeze of inflation elsewhere in the economy and have traded down to lower-priced products. Prices have fallen much more quickly in other states — such as Colorado, California and Michigan — where less-strict regulations allowed more companies into the legal market than in Illinois, which is one of the more restrictive markets.
Illinois also is feeling the impact of lower purchases from out-of-state residents since Missouri started recreational-marijuana sales in February. Total out-of-state sales dropped 21% year-over-year in April to $32.4 million. In-state sales increased nearly 10% to nearly $100 million.
Illinois also is hampered by slower-than-expected opening of new stores. The state issued 192 new dispensary licenses last year, but only 18 have opened since then. (Full Story)