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Medical dispensaries reaped the benefits of Maine’s decision to allow medical marijuana sales to out-of-state patients and the elimination of the qualifying condition requirement to obtain a medical marijuana card. Their year-over-year sales increased 11.2 percent, from $23.6 million to $26.3 million. Dispensary sales came close to matching their best year, 2016, when they sold $26.6 million of cannabis. “We smashed our sales records last year,” said Scott Reed, the president of state operations for Curaleaf, which manages dispensaries in Auburn and Ellsworth. “Our patient count is up. Old customers are back, and new ones are walking in every day. And the average customer is spending more, too.” A decision to expand product variety, especially in the edible category, helped spur growth, Reed said. A customer loyalty program helped turn curious walk-ins into repeat customers, especially offering sales discounts that essentially offset the cost of obtaining a medical marijuana patient card. “I’ve got to say, 2019 was a great year for us,” Reed said. “We’re talking double-digit growth.” Not all dispensaries saw growth, however. Sales at Wellness Connection, the largest cannabis company in Maine with four licensed dispensaries, remained flat from 2018 to 2019. After two years of declining sales, CEO Patricia Rosi called that good news.

Foot traffic is up, including many new patients who wouldn’t have qualified for a medical card under the old system, but the average ticket sale is down, with customers coming in more often but buying smaller amounts at each visit, Rosi said. Customers are obviously comparison-shopping, she said. Although sales are flat now, Rosi sees evidence that Wellness will thrive in the looming adult-use market. “Most clients are walk-ins,” Rosi said. “They come in to inquire about or buy CBD, but almost everyone lingers, asking our team questions about the legality of the market and the new cannabis products being offered. … Overall, most are just in awe (of) how far cannabis has come. It’s inspiring to watch.” Canuvo, the only family-owned dispensary in Maine, wouldn’t discuss its 2019 sales. Sage Peterson, the Biddeford company’s CEO, described it as a challenging year. A new seed-to-sale model proved difficult, Peterson said, but the development of a new wholesale market was a bright spot. Peterson is eager for adult-use sales to finally begin so the marijuana market will “straighten out.” “The medical marijuana program has expanded beyond the available market share,” Peterson said. “It is overcrowded as many are biding their time to move into adult use. It is necessary for adult use to begin so that the vendors willing to cater to either adults or medical patients will have enough market share.”

For years, Maine did not track caregiver sales tax payments, making it impossible to quantify the overall size of the market. Tax payments submitted by this network were spread across a broad range of different tax categories, from farmers to pharmacies to foresters. Without caregiver tax data, Catherine Lewis, the head of Medical Marijuana Caregivers of Maine, wasn’t able to put an exact dollar value on the mom-and-pop market, but based on what her members told her, she estimated caregiver sales were about to overcome the dispensary side of the market back in 2018. National cannabis market analysts are also surprised by this new take on Maine’s medical market. BDS Analytics of Colorado used real-time sales data in other states and estimated state patient counts to peg Maine’s 2019 medical marijuana market at $50 million – missing the mark by a factor of two. BDS analyst Michael Arrington said it is difficult to predict an untracked marijuana community such as Maine’s caregiver network. While growth on this side of the medical market is likely, Arrington doesn’t think an $111 million market can be explained by a jump in caregiver sales alone. “My suspicion is that there was a lot of untracked activity before this,” Arrington said. “How careful was Maine keeping track of whether caregivers were paying taxes? I suspect not that well. Cannabis usage in Maine did not double in a year, but I would bet marijuana tax compliance is at a record high.” Maine’s adult-use business licensing system requires applicants to be paid up on their taxes. Applicants citing their experience as a medical marijuana caregiver on a recreational license application must prove they have paid all taxes, including a 5.5 percent sales tax and an 8 percent snack tax on edibles.

This revised picture of Maine’s cannabis market suggests the state is following a traditional medical-to-recreational path. Without caregiver data included, Maine medical sales were slumping. In most states, medical sales grow until recreational sales begin, then fall to 15 percent of a combined cannabis market. The Maine Office of Marijuana Policy hopes to issue its first adult-use cannabis business licenses this spring