Ohio Legalization - Early Results

At long last Ohio, the 25th state to legalize cannabis, approved 98 retailers to begin recreational sales on Tuesday August 6th. Here at Headset we watched the new sales flow into the Buckeye state where the effects of the new market were immediately seen.

During the week prior, a typical Ohio retailer was generating approximately $12,740 in medical only sales a day. When stores launched recreational sales on Tuesday, that number jumped to $33,864 - which is a 270% increase in total sales compared to the previous three Tuesdays. Now in motion, the Ohio cannabis industry has the potential to grow to be one of the largest markets in the US as retailers adapt their business to the growing volume of customers.

The transition to recreational has been swift in Ohio, with 76% of total sales on the first day coming from recreational customers. However, the hype has worn slightly and the recreational portion of sales has averaged out to approximately 68% in the last three days.

The portion of recreational sales is noticeably lower than in other mature markets. Ohio retailers will likely see a gradual shift with larger portions of their sales going to recreational customers.

Assortment of product preferences among Ohio customers already reflects national averages. However, the new Ohio adult use market is being held to medical standards, meaning customers will have to wait until at least September for the introduction of Pre-Rolls and high potency Concentrates. Until then, it seems as though Ohioans are purchasing a lot more Flower to compensate for the lack of Pre-Rolls.

Compared to the previous Tuesday, the first day of recreational sales saw a massive boost in transaction volume allowing retailers to pull back on discounting and ride the wave of customers. The launch day saw slightly smaller baskets driven by fewer items per basket.

As is almost always is the case with market launches, Ohio has some of the most expensive cannabis in the country with an average item price of nearly $40. These prices will almost certainly start to fall, but it will need to come down quite a bit before it can be competitive with other regional markets such a Michigan which has the lowest AIP in the country at $10.90

The future of the Ohio cannabis market is here and changing by the day. Whether it is analyzing your retailer operation, managing inventory with partners, or combing through market trends, Headset has you covered to help you grow alongside one of the most exciting markets of 2024.

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