Local news outlet WPRI reported last week that the state’s Office of Cannabis Regulation says that recreational marijuana sales “have steadily increased almost monthly over the past year, and the estimated sales for Fiscal Year 2024 is $76 million.”

“That sales estimate, if met, would translate into more than $15 million in state and local revenue: $7.6 million from the state’s 10% cannabis tax, $5.3 million from the 7% sales tax and $2.3 million from the 3% local tax,” the station reported, noting that the Office of Cannabis Regulation “estimates that, in October alone, more than $7 million worth of recreational cannabis products were sold statewide.”

Rhode Island lawmakers last year passed a bill that legalized recreational cannabis for adults aged 21 and older, making it the 19th state in the U.S. to do so.

The bill, which legalized possession of up to one ounce of cannabis for adults and also permitted possession by adults of up to 10 ounces is permitted in a private home, was approved by members of the state General Assembly in May of 2022. The measure also established the framework for legal, regulated recreational cannabis sales in Rhode Island.

“This is a truly momentous day for Rhode Island. I’m deeply grateful to Senator Miller for his years of hard work and leadership on this issue, and I’m incredibly proud to have been part of reaching this point,”  Rhode Island state Senate Majority Leader Michael McCaffrey, a Democrat, said after the legislation passed. “Ending cannabis prohibition helps us right past wrongs while creating new opportunities for all Rhode Islanders. This is the right move, at the right time, for our state.”

The bill was signed into law by Rhode Island Gov. Dan McKee, a Democrat, who later announced that legal cannabis sales would launch on December 1, 2022.

“This milestone is the result of a carefully executed process to ensure that our state’s entry into this emerging market was done in a safe, controlled and equitable manner,” McKee said last year after the sales date was announced. “It is also a win for our statewide economy and our strong, locally based cannabis supply chain, which consists of nearly 70 licensed cultivators, processors and manufacturers in addition to our licensed compassion centers. Finally, I thank the leadership of the General Assembly for passing this practical implementation framework in the Rhode Island Cannabis Act and I look forward to continuing our work together on this issue.”

The Rhodes Island Cannabis Act included “a call for applications for ‘hybrid retail licenses,’” according to the governor’s office. Those hybrid licenses “allow licensed compassion centers to sell both medical marijuana as well as safe, well-regulated and competitively priced marijuana products to Rhode Island adults over the age of 21, was issued in early October,” McKee’s office said last year.

Five cannabis dispensaries (described as “compassion centers” by the state) received approval from the state to open for business on December 1, 2022. There are currently seven licensed dispensaries in Rhode Island, although the state has allowed for 33 retail licenses to ultimately be awarded.

Matt Santacroce, interim deputy director of the Rhode Island Department of Business Regulation, said at the time that the state was “pleased with the quality and comprehensiveness of the applications we received from the state’s compassion centers, and we are proud to launch adult use sales in Rhode Island just six months after the Cannabis Act was signed into law, marking the Northeast’s fastest implementation period.” 

According to the Providence Journal, “$62.9 million worth of recreational retail marijuana has sold in Rhode Island since retail sales began last December,” although that figure “does not include sales for November, nor does it include medical marijuana sales, which are counted separately.”

Including medical marijuana sales, “total retail marijuana sales in Rhode Island top $95 million,” according to the Journal.

But as in other states that have taken the step to legalize adult-use cannabis, the change in law has also resulted in a dip in medical marijuana sales.

Erica Ferrelli, chief of strategic planning, monitoring and evaluation for the state cannabis office, told the Providence Journal that there has been a “drastic” decline in medical marijuana patients over the last year.

“Last December, 15,062 active patients bought marijuana from Rhode Island dispensaries. By October that number had fallen to 10,377,” the Journal reported.

Ferrelli told the newspaper that many patients “just find it easier to transition to the adult-use market” and pay a higher tax in order to avoid “the burden of finding a doctor, getting them to sign you into the program, which is still pretty difficult, pay for an appointment and get yourself there, which for some patients might be quite the hassle.”

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The Massachusetts CCC’s report shows that between Jan. 1 and Dec. 18, 2022, the state collected $1.42 billion in adult-use sales. In a breakdown of sales by month, the state collected a fairly steady amount of sales, the highest being $132.4 million in July and $130.8 million in August, and the lowest with $110.1 million in February and only $73 million in December (since recording ended on Dec. 18, this sales data is lower).

The last week of sales by day leading up to Dec. 25 were notably high, starting at $3.2 million on Monday, Dec. 12 reaching a height of $5.1 million on Saturday, Dec. 17, and dropping to $4 million on Dec. 18. Consumers mainly purchased flower during this week specifically, with a total of over $11 million, followed by vape-related products at $6 million, and pre-rolls and edibles nearly the same, both around $4 million each.

Massachusetts legalized adult-use cannabis in November 2018, and since then the state has collected $3.9 billion in total gross sales. It first reached the $1 billion mark in October 2020, then $2 billion in July 2021, and $3 billion in May 2022.

Medical cannabis sales in 2022 during the same period reached $260.2 million, although a gradual decline is seen after the highest medical sales months of March and April, which collected $24.7 million and $24.4 million respectively. The Massachusetts CCC’s graph generally shows a decrease in sales from that point, down to $20.6 million in November, and finally $12.1 million in December.

Gross medical cannabis sales just hit $929.6 million this December, which still reflects steady overall growth since November 2018. Although medical cannabis went live in Massachusetts in January 2013, sales data prior to November 2018 is not available prior to when the CCC took control over the Medical Use of Marijuana Program.

Over the past four years since adult-use cannabis began, the cost of flower has decreased over time. With a few exceptions in March, April and May 2020 due to the pandemic, the average price of flower per gram has remained around $14 until June 2021. After that point, price per gram continued to decrease every month, landing at $7.76 per gram in November 2022, and increasing slightly to $8.07 in November 2022. This coincides with CCC data showing the state’s history with cannabis cultivation. In terms of plants harvested, the state began with only 79 plants in November 2018; followed by 247,793 in November 2019; 699,938 in November 2020; 1,413,311 in November 2021; and finally a huge jump to 2,655,494 plants in November 2022.

According to Boston.com, Brandon Pollock, CEO of Theory Wellness, said that the completion of many cultivation facilities over the last year has contributed to the imbalance of supply and demand. “The last 12 months have been fairly drastic. I’d say on the wholesale market, prices might be down approximately 50% in one year, which is, for folks that are only on the cultivation side of the business, especially difficult,” Pollock told Boston.com.

Joseph Lekach, CEO of Apothca, also explained that this imbalance has been present for some time. “A year and a half, two years, three years ago, it wasn’t good either. It was unbalanced to the high side, now it’s unbalanced for the low side. So this is temporarily good from a customer’s perspective,” Lekach told Boston.com. “But a lot of manufacturers and cultivators will cut costs wherever they can just to stay alive. You’re going to have an inferior product coming out. It’s a double-edged sword.”

Lekach also estimated that based on this current trend, many cannabis companies will be out of business by next year. “We have no idea where the bottom is going to be. I think that there’s a lot of companies suffering because of this,” said Lekach. “I think you’re going to see a lot of companies going out of business probably next year and into 2024.”

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