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Chart: Adult-use marijuana sales show resiliency in May, despite pandemic

2020-06-17

More than months into the coronavirus pandemic, cannabis sales in five of the nations’ largest recreational markets are a mixed bag.


But sharp sales increases in Oregon and Washington state – two mature adult-use markets driven by demand from in-state residents rather than tourists – suggest that marijuana consumption is rising during the COVID-19 crisis, indicating that the cannabis industry at-large is likely well positioned to weather a prolonged period of economic instability.

Since March – when the pandemic hit the United States in earnest – adult-use cannabis sales in Oregon and Washington state have surged.

Oregon’s sales increases are especially notable, up nearly 60% from May 2019 and breaking the $100 million mark last month for the first time since the market launched in 2015.

While the gains in Washington state aren’t quite as dramatic, sales in March, April and May 2020 increased by an average of 28.5% over the same months a year ago.

For context, Washington state’s adult-use cannabis market generated $1.1 billion in 2019 – up 8% over 2018 – meaning the 2020 sales growth rate so far is roughly three times last year’s rate.

In California, Colorado and Nevada, however, it’s clear that the pandemic has been a drag on each state’s adult-use cannabis market.

However, because tourism plays a larger role in these markets, it’s possible that consumption by in-state residents is increasing even while overall sales fall.

In Colorado, for example, medical marijuana sales – which consist solely of transactions involving in-state residents – eclipsed $36 million in April 2020, an increase of 31% over April 2019 and the strongest month of MMJ sales since August 2017.

Las Vegas – one of the most popular tourist destinations in the world – closed to outside visitors in mid-March. While 80% of adult-use cannabis sales in Nevada take place in Clark County, where Las Vegas is located, adult-use sales for the state in May fell by 25% compared to the same month last year.

The picture in California is less clear. The state’s nascent marijuana industry is grappling with a bevy of other challenges, including high prices, a lack of retail stores and an entrenched illicit market.

 
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