According to the latest data from New Frontier, consumer behavior regarding the purchase of cannabis products is experiencing a notable shift. The data reveals that more consumers are opting to order their cannabis products from brick and mortar dispensaries, indicating a growing preference for in-person shopping experiences. In 2022, 34% of consumers chose physical dispensaries, and this figure has risen to 43% in 2023. Additionally, there has been a slight reduction in cannabis delivery, with 18% of consumers utilizing this option in 2022, which has decreased to 15% in 2023. This trend can be attributed to a post-COVID era where individuals feel more comfortable leaving their homes and seeking out physical retail experiences. In this article, we will explore the normalization of cannabis product and sourcing choices, and how these changes are shaping the industry.

The cannabis industry has witnessed significant transformations ovcer the past few years, propelled by shifting consumer preferences and evolving legal frameworks. As cannabis becomes more mainstream and socially accepted, consumers are becoming increasingly discerning about their product choices and the channels through which they acquire them. The data from New Frontier reflects a growing inclination towards brick and mortar dispensaries, signaling an important transition in the cannabis purchasing landscape. (Brick and mortar refers to a physical business establishment, typically characterized by a storefront. It is a term commonly used in the context of retail and encompasses physical stores, shops, or outlets where customers can directly visit and engage in face-to-face transactions).

Despite the rise of online shopping and e-commerce, brick and mortar businesses continue to hold significance in the commercial landscape. They provide opportunities for personal interactions, immediate gratification, and the ability to build trust between businesses and customers through direct engagement. While the retail landscape continues to evolve, brick and mortar establishments remain an integral component of consumer culture and contribute to the overall vibrancy of local economies.

Now let’s break down the data from the infographic:

Adult Use %:

Adult Use refers to the percentage of consumers who use cannabis for recreational purposes, also known as adult use. It focuses on the preferences of individuals who consume cannabis without a medical prescription.

Brick and Mortar: This percentage represents the portion of adult cannabis users who choose to purchase their products from physical dispensaries or retail stores. It indicates the growing popularity of in-person shopping experiences and suggests a preference for a comprehensive and immersive cannabis purchasing experience.

Delivery: This percentage represents the portion of adult cannabis users who opt for delivery services to receive their products. It indicates the convenience and accessibility of having cannabis products delivered directly to their doorstep. However, as mentioned earlier, the data shows a slight reduction in this category, possibly due to a shift towards in-person shopping experiences.

Friend: This percentage represents the portion of adult cannabis users who acquire their products through a friend. This often involves informal transactions where a friend, who may have purchased cannabis legally or illegally, supplies the product to the consumer. This method is more common in social circles where individuals share cannabis among themselves.

Dealer: This percentage represents the portion of adult cannabis users who rely on a traditional dealer to obtain their products. These dealers operate outside of the legal market and provide cannabis that may be of uncertain quality and legality. The data likely reflects a segment of consumers who either cannot access legal channels or prefer to obtain cannabis through illicit means.

Medical Use %:

Medical Use focuses on the percentage of consumers who use cannabis for medical purposes. These individuals typically have a medical prescription or recommendation from a healthcare professional, and their cannabis use is aimed at alleviating specific symptoms or managing medical conditions.

Brick and Mortar: This percentage represents the portion of medical cannabis users who choose to purchase their products from physical dispensaries. It highlights the importance of knowledgeable staff and a wide selection of products for individuals seeking cannabis as a medical treatment. Physical dispensaries provide an environment where patients can interact with budtenders, receive guidance, and find products that suit their medical needs.

Delivery: This percentage represents the portion of medical cannabis users who rely on delivery services to obtain their products. For patients who may have mobility issues or prefer the convenience of home delivery, this option ensures access to their medication without having to leave their residence.

Friend: This percentage represents the portion of medical cannabis users who acquire their products through a friend. Similar to the adult use category, some medical cannabis patients may rely on friends who have legal access to cannabis or who cultivate it for personal medical use. This method often involves informal transactions within trusted networks.

Dealer: This percentage represents the portion of medical cannabis users who obtain their products from illegal or unregulated sources. This may be due to various factors such as limited access to legal medical cannabis, challenges in obtaining medical prescriptions, or personal preferences for acquiring cannabis outside of the regulated market.

Illicit States %:

Illicit States refers to the percentage of consumers who reside in states where cannabis is illegal for both recreational and medical use. These consumers do not have access to legal channels for purchasing cannabis products and may resort to alternative means.

Brick and Mortar: This percentage represents the portion of consumers in illicit states who still manage to access cannabis through physical dispensaries. It indicates the presence of unregulated or underground cannabis markets within these states, where individuals can find cannabis products despite legal restrictions.

Delivery: This percentage represents the portion of consumers in illicit states who rely on delivery services to obtain cannabis products. Similar to the brick and mortar category, this indicates the existence of unregulated delivery services operating within illegal cannabis markets.

Friend: This percentage represents the portion of consumers in illicit states who acquire cannabis products through friends. Due to the lack of legal access, individuals may rely on personal connections to obtain cannabis from friends who have access to legal or illicit sources. This method allows consumers to bypass the restrictions imposed by illegal cannabis markets.

Dealer: This percentage represents the portion of consumers in illicit states who rely on traditional dealers to acquire cannabis. In states where cannabis is illegal, underground dealers or black market networks may thrive, supplying cannabis products outside of regulatory frameworks. Consumers in these states may turn to dealers as their primary source for obtaining cannabis.

One possible explanation for the surge in brick and mortar dispensary visits is the desire for a more immersive and personalized shopping experience. While online ordering and delivery services provide convenience, physical stores offer consumers the opportunity to interact with knowledgeable staff, explore a wider range of products, and benefit from in-person recommendations. This shift in consumer behavior reflects the growing demand for a comprehensive shopping experience that combines education, product variety, and face-to-face engagement.

Moreover, the decline in cannabis delivery services can be attributed to the changing dynamics of post-pandemic life. As vaccination rates increase and individuals regain a sense of normalcy, they are more inclined to venture out of their homes for various activities, including shopping for cannabis. The comfort and safety concerns that once necessitated delivery services are gradually subsiding, allowing consumers to embrace the tactile experience of physically browsing dispensary shelves and making their selections in person.

The normalization of cannabis product and sourcing choices also points to the growing sophistication of consumers. As the industry expands and product options diversify, consumers are developing a refined taste for specific strains, product formats, and brands. In physical dispensaries, customers can engage directly with budtenders, who provide valuable insights and guidance on product characteristics, effects, and potential therapeutic benefits. This personalized approach empowers consumers to make more informed decisions about their cannabis purchases, ultimately enhancing their overall satisfaction.

Furthermore, the increased preference for brick and mortar dispensaries may have positive implications for the wider cannabis industry. Physical stores not only drive local economic growth but also foster a sense of community among cannabis enthusiasts. Dispensaries often host educational events, product launches, and social gatherings that facilitate knowledge sharing and social interaction within the cannabis community. By embracing physical dispensaries, consumers are actively contributing to the establishment and sustainability of a vibrant cannabis culture.

Benefits of Using Licensed Retailers (Brick and Mortar / Delivery):

Quality and Safety Assurance: Licensed retailers in the legal cannabis industry are subject to regulations and quality control measures. They source their products from licensed producers who adhere to stringent standards for cultivation, processing, and testing. By purchasing from licensed retailers, consumers can have confidence in the quality and safety of the cannabis products they are obtaining. This assurance is lacking when acquiring cannabis from friends or dealers, where the source and quality may be uncertain.

Product Variety and Selection: Licensed retailers offer a wide range of cannabis products, including different strains, formats (such as flowers, edibles, topicals, and concentrates), and potency levels. They often carry products from multiple brands, providing consumers with a diverse selection to choose from. This variety allows consumers to explore and find products that best suit their preferences and needs. Friends or dealers may have limited product options and may not offer the same level of variety.

Knowledgeable Staff and Education: Licensed retailers employ trained staff who possess knowledge about different cannabis strains, product effects, dosages, and consumption methods. They can provide personalized guidance and recommendations based on consumers’ preferences, desired experiences, and medical needs. Licensed retailers prioritize consumer education, helping individuals make informed decisions about their cannabis purchases. Friends or dealers may not have the same level of expertise or the ability to offer comprehensive information and guidance.

Legality and Compliance: Using licensed retailers ensures compliance with local and state laws regarding cannabis purchase and possession. Consumers can avoid legal complications and potential risks associated with obtaining cannabis from unregulated sources. Licensed retailers operate within the framework of the law, promoting a responsible and legal cannabis market.

Driving Adoption of Product Sales through Licensed Retailers (Brick and Mortar / Delivery):

Awareness Campaigns: The licensed cannabis industry can invest in educational campaigns that highlight the benefits of purchasing from licensed retailers. These campaigns can emphasize the quality assurance, product variety, and safety aspects that come with purchasing from regulated sources. By increasing consumer awareness and understanding, the industry can encourage more individuals to choose licensed retailers over friends or dealers.

Enhancing Customer Experience: Licensed retailers should focus on providing exceptional customer experiences. This includes creating welcoming environments, offering personalized recommendations, and providing education about the products they carry. By prioritizing customer satisfaction and building trust, licensed retailers can attract more customers and retain their loyalty.

Collaboration with Healthcare Professionals: Establishing partnerships with healthcare professionals can help promote the use of licensed retailers for medical cannabis needs. By educating healthcare providers about the benefits of regulated cannabis products and referring patients to licensed retailers, the industry can drive more adoption of product sales through legal channels.

Convenience and Accessibility: Licensed retailers, both brick and mortar and delivery services, should strive to offer convenient and accessible options to consumers. This includes online ordering platforms, fast and reliable delivery services, and ensuring that dispensaries are located in areas easily accessible to customers. By prioritizing convenience, the licensed industry can compete with the convenience often associated with obtaining cannabis from friends or dealers.

Regulated Market Expansion: The growth and expansion of the licensed cannabis industry play a crucial role in driving adoption of product sales through licensed retailers. As more states or countries legalize cannabis, it becomes easier for consumers to access regulated markets. By advocating for responsible regulation and expanding legal access, the industry can create an environment where licensed retailers are the preferred and convenient option for consumers.

By emphasizing the benefits of licensed retailers, improving the customer experience, and expanding the regulated market, the licensed cannabis industry can effectively drive more adoption of product sales through licensed retailers, reducing reliance on friends or dealers and promoting a safer and more regulated cannabis market.

The shifting consumer behavior observed in the latest data from New Frontier reflects the normalization of cannabis product and sourcing choices. With a greater emphasis on brick-and-mortar dispensaries and a slight decrease in delivery services, consumers are seeking more immersive and personalized experiences when purchasing cannabis products. This trend signifies a growing sophistication among consumers, a desire for face-to-face engagement, and a sense of confidence in leaving home post-COVID. As the industry continues to evolve, understanding and adapting to these changing consumer preferences will be crucial for businesses to thrive in the competitive cannabis market.

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The U.S. cannabis industry is finally experiencing some much-needed tax relief as an increasing number of states pass laws to exempt businesses from Section 280E of the federal tax code. With 20 states having implemented these exemptions, cannabis operators are beginning to see a glimmer of hope amidst the burdensome tax landscape.

States such as Connecticut, Illinois, New Jersey, and New York have recently taken significant steps by passing legislation that allows cannabis companies to deduct business expenses from their state income taxes, despite the plant’s federal illegality. This progressive approach could potentially translate into substantial savings, especially for larger operators, depending on the prevailing corporate tax rates in each state.

Connecticut, in particular, has made significant strides in providing state-level tax relief to licensed cannabis businesses. Governor Ned Lamont signed budget legislation that includes provisions for the state-level 280E workaround, enabling licensed cannabis businesses to deduct ordinary and necessary expenses from their state income taxes that are disallowed under Section 280E of the Internal Revenue Code. This move is expected to result in millions of dollars in industry relief for the coming fiscal years, providing a significant boost to the Connecticut cannabis industry.

The benefits of these exemptions from Section 280E vary from state to state. For instance, states like Nevada, which do not have a corporate tax, provide a unique advantage for cannabis businesses operating within their borders. On the other hand, states like Illinois, with a corporate tax rate of 9.5%, present a different scenario where the potential tax savings can be significant for cannabis operators.

While the state-level tax relief brings some respite, the cannabis industry still grapples with significant federal tax liabilities. In 2022 alone, the industry reportedly paid an estimated $1.8 billion more in federal taxes compared to non-cannabis businesses, and this figure is projected to rise to $2.1 billion in 2023. This disparity underscores the urgent need for federal reforms in addressing the tax challenges faced by the industry.

Stakeholders in the cannabis industry, including insiders and investors, eagerly await potential changes at the federal level. These changes could include the rescheduling or de-scheduling of cannabis, which would alleviate the burdensome tax burden and foster the long-term growth of the industry. The progress made at the state level in providing tax relief is an encouraging step forward, but formidable federal tax liabilities persist and necessitate significant federal reforms.

In conclusion, the U.S. cannabis industry is gradually reaping the benefits of state-level tax exemptions, enabling businesses to deduct expenses from their state income taxes. Connecticut’s recent enactment of budget legislation providing tax relief to licensed cannabis businesses is a notable example of this progress. However, it is essential to recognize that the scope of these benefits varies from state to state, depending on their respective tax structures. While state-level relief is a positive development, significant federal reforms are still needed to address the industry’s tax challenges and promote its sustainable development.

(Disclaimer: “Yes Cannabis agrees with the points presented in this article. They support the notion that the U.S. cannabis industry is benefiting from state-level tax exemptions and the reduction of the tax burden imposed by Section 280E. More details on this topic can be found through MJBizDaily.”)

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Maryland is gearing up for the official implementation of its marijuana legalization law, set to take effect this weekend. The new law will legalize the possession and cultivation of cannabis for personal use, marking a significant milestone for the state. As the majority of existing medical cannabis dispensaries prepare to open their doors to adult consumers, Governor Wes Moore is reaffirming his commitment to fostering an equitable and inclusive cannabis industry.

Expanding Dispensaries

Nearly 100 dispensaries in Maryland have received approval from state regulators to become dual licensees, allowing them to serve both medical patients and adults over the age of 21. Starting July 1st, these dispensaries will be authorized to sell cannabis to both groups, following the legalization measure approved by voters last year. This move reflects the state’s efforts to ensure that the industry infrastructure aligns with the legalization of simple possession and home cultivation.

Governor’s Equity Focus

During a recent Cannabis Regulators Association conference, Governor Moore emphasized the importance of equity in cannabis policy. He acknowledged the historical use of cannabis laws to oppress and discriminate against marginalized communities, particularly people of color. Governor Moore stated that the war on drugs not only failed but weakened the nation. Moving forward, he highlighted the need to focus on both equity and economic growth, rejecting the false choice between the two.

Industry Readiness

In addition to the dispensaries, the Maryland Cannabis Administration has approved 38 cultivators and manufacturers to supply the new adult-use market. Existing medical cannabis license holders and preapproved entities are required to convert their licenses to standard medical and adult-use licenses to operate from July 1st. The regulatory framework for cannabis sales was established through legislation signed by Governor Moore last month. The rule sets definitions, outlines possession limits, clarifies licensing protocols, and addresses enforcement authorities and penalties.

Grants for Transition

To support the transition of existing medical marijuana businesses into the adult-use market, the state’s Department of Commerce is offering grants. This initiative aims to facilitate a smooth conversion process and ensure a robust and diverse cannabis industry in Maryland.

Key Provisions of the Law

Under the new law, adults aged 21 and older will be allowed to possess up to 1.5 ounces of cannabis. Furthermore, they can cultivate up to two plants for personal use and gift cannabis without receiving any remuneration. The law also includes provisions for the expungement of past convictions related to conduct made legal by the new law. People currently serving time for such offenses will be eligible for resentencing.

Conclusion

Maryland’s marijuana legalization law is set to bring significant changes to the state’s cannabis landscape. With the commencement of sales and the opening of dispensaries to adult consumers, Maryland is embracing a new chapter focused on equity and economic growth. Governor Moore’s commitment to prioritizing equity in the cannabis industry sets a positive precedent for other states considering similar legislation. As Maryland moves forward, it aims to build a thriving and inclusive cannabis market that benefits all its residents.

Source: MarijuanaMoment

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The Department of Cannabis Control (DCC) has recently announced an exciting development in California, focused on expanding access to licensed cannabis retail. A total of 18 local jurisdictions have been selected to receive funding through a pioneering program that aims to facilitate the establishment of cannabis retail licensing pathways. This funding will not only enhance consumer access to cannabis products but also provide crucial support to equity operators, promoting a more equitable and inclusive legal cannabis market.

Out of the 18 chosen jurisdictions, 14 have proposed equity programs specifically designed to assist and streamline the licensure process for cannabis equity retail businesses. Recognizing the importance of equity within the industry, these programs will play a vital role in fostering a fair and inclusive legal cannabis market.

The Local Jurisdiction Retail Access Grant (LJRAG) program, the first of its kind in the United States, will allocate $4 million to cities and counties across California. The primary goal is to improve consumer access to regulated cannabis retail. Notably, $870,000 will be awarded to the 14 jurisdictions that have outlined initiatives to support and issue licenses to equity applicants as part of their retail licensing programs.

Rasha Salama, Acting Director of the Department of Cannabis Control, highlighted the significance of the program, emphasizing its role in expanding access to licensed cannabis retail. Salama stated, “The Local Jurisdictional Retail Access Grant program will help provide access to regulated cannabis retail for over 2 million Californians that currently live in an area where access to licensed cannabis retail businesses is insufficient. In addition to improving access to existing customers, these grants are another important step towards establishing legal pathways for legacy and social equity operators.”

The grant awards for Phase I were distributed to the following jurisdictions:

In Phase I, the allocation of funds prioritized areas with high cannabis consumption but limited or no access to legal cannabis retail. The program also incentivized best practices at the local level by favoring jurisdictions that support equity operators and utilize existing licensing and permitting processes. By assisting local governments in establishing cannabis retail licensing programs, the grant aims to meet the demand for cannabis in areas where access is currently restricted.

The grant recipients will utilize the funds to develop retailer licensing programs, which will include activities such as drafting and adopting ordinances, hiring staff and contractors, conducting community outreach and engagement events, forming stakeholder workgroups or technical advisory committees, conducting economic studies and environmental reviews, developing application forms or online application portals, and processing and issuing cannabis retail licenses.

Phase II of the grant program will allow eligible local jurisdictions to apply for additional funding based on the number of retail licenses they have issued.

For more detailed information about the Local Jurisdiction Retail Access Grant (LJRAG), interested individuals can visit the official website.

The Department of Cannabis Control (DCC) is responsible for licensing and regulating commercial cannabis activities in California. It collaborates closely with businesses and local jurisdictions to establish a sustainable and equitable cannabis industry, prioritizing public health, safety, and environmental protection. To learn more about the California cannabis market, state licenses, or laws, please visit the official website at www.cannabis.ca.gov.

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on the The city of Los Angeles has taken a significant step towards fostering a healthier and more equitable licensed cannabis market with the launch of a dedicated job board. This innovative initiative aims to connect individuals seeking employment opportunities in the cannabis industry with licensed businesses in the local Los Angeles area.

With the rapid growth of the cannabis industry, it is crucial to ensure that the market operates within a regulated framework, prioritizing social equity and providing opportunities for marginalized communities. By establishing a job board specifically tailored to cannabis licenses, Los Angeles is taking a proactive approach to support fair employment practices and promote a level playing field for all interested parties.

One of the key objectives of this new job board is to facilitate greater participation from individuals who have been disproportionately affected by past cannabis-related policies. Los Angeles has made substantial efforts to address social equity concerns by providing various benefits to those impacted communities, including priority licensing, business development resources, and now, enhanced access to employment opportunities.

“By offering a centralized platform for job postings, the city of Los Angeles ensures transparency and equal access to employment prospects within the cannabis industry.” 

This initiative will help local residents find meaningful work, while licensed cannabis businesses can tap into a diverse pool of qualified candidates. It serves as a valuable tool for both job seekers and employers, fostering a healthier and more inclusive ecosystem.

The newly launched job board reflects Los Angeles’ commitment to supporting social equity in the cannabis sector. The city acknowledges the need to rectify the historical injustices faced by marginalized communities affected by the war on drugs. By creating opportunities for meaningful employment, Los Angeles is making strides toward addressing the systemic issues that have disproportionately impacted these communities.

This platform provides an efficient and user-friendly interface for job seekers to browse through postings, submit applications, and connect with licensed businesses in the city. To explore the available job opportunities within the Los Angeles cannabis industry, individuals can visit the dedicated job board on the Department of Cannabis Regulation’s website by following this link.

As Los Angeles continues to shape its cannabis industry, the launch of this job board represents a significant milestone in establishing a healthier, regulated market. By promoting social equity and providing access to employment opportunities, the city is fostering an inclusive ecosystem that benefits all stakeholders involved. This initiative serves as an inspiring example for other regions looking to create a fair and thriving cannabis market while rectifying past injustices.

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California’s Cannabis industry continues to dominate as the world’s largest cannabis market, despite facing financial and tax challenges. According to the recently published MJBiz Factbook, the state is estimated to generate nearly $5.9 billion in legal recreational and medical marijuana sales in 2023. To put this into perspective, the revenue from marijuana sales in California could support the economy of a small island nation.

The International Monetary Fund (IMF) projects that the gross domestic product (GDP) of Barbados, a Caribbean island nation, will reach $6.1 billion in 2023. Similarly, the GDP of Fiji, a South Pacific island, is projected to be approximately $5.4 billion this year.

The size of California’s cannabis market should come as no surprise, considering that its GDP in 2022 ($3.6 trillion) would rank fifth globally if the state were a country, positioning it between Germany ($4.2 trillion) and India ($3.2 trillion).

Furthermore, marijuana has emerged as one of California’s leading agricultural products, rivaling or even surpassing the value of two significant crops. In 2022, grape production, renowned for the state’s world-class wine industry, was valued at $5.5 billion, followed by almonds at $3.5 billion.

Compared to California, most other marijuana markets in the United States pale in comparison. Michigan, the second-largest American marijuana market in terms of sales, is projected to generate only half the consumer purchases of California in 2023, amounting to $3.1 billion in combined recreational and medical marijuana sales.

Despite being the global leader in sales, California’s marijuana industry faces various challenges. One such challenge is the impact of high taxes and local control, which has led to financial difficulties for businesses and investors. The burden of taxes imposed on cannabis products is significantly higher compared to other commodities. For example, while the state excise tax on a bottle of wine is only 4 cents, it amounts to $4.90 or over 100 times more for an eighth-ounce of cannabis. Moreover, the requirement for cannabis businesses to obtain permits from both local jurisdictions and the state has resulted in retail bans in many areas, effectively ceding a significant portion of the market to illegal operators.

These challenges have contributed to the persistence of the illicit market, which still accounts for two-thirds of cannabis purchases in California. Legal sales have experienced a decline for the past two years, exacerbating the financial strain on businesses and hindering the growth of the legal market. As a result, some well-capitalized businesses have withdrawn investments, describing the market as “brutal” and “toxic.” Addressing these challenges will be the key to  unlocking the industry’s full potential in California. To do so will require immediate reforms that aim to reduce taxes, create a more favorable regulatory environment, and ensure that legal cannabis is more accessible and affordable for consumers. By doing so, the industry can compete more effectively with the illicit market, achieve the goals set forth in Proposition 64, and solidify California’s position as the global leader in the cannabis market.

Despirte these challenges, California is unlikely to face significant competition until other U.S. states with substantial populations, like New York, expand their marijuana markets or until states like Pennsylvania legalize recreational marijuana sales. The same applies to the opening of legal recreational markets in countries such as Germany.

Obtaining accurate data on legal cannabis sales in international markets is challenging. However, Canada, arguably the largest legal adult-use market outside the U.S., recorded only $3.4 billion in recreational sales in 2022.

To illustrate the magnitude of California’s marijuana market, here is an accompanying infographic that visually depicts its size.

Original article by: Andrew Long
Source: Mjbizdaily

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