The Massachusetts cannabis market: A high-level overview

Introduction

Massachusetts was one of the only states to ban legal cannabis in March during the COVID pandemic. When cannabis stores finally reopened on May 25th, sales increased, surpassing monthly sales numbers from before the shutdown. This report examines cannabis sales in Massachusetts in 2020, from January to August. The report also compares Massachusetts to other legal cannabis markets that did not shut down during COVID in order to further dive into the nuances of the cannabis market in Massachusetts.

Executive Summary

Despite state-wide cannabis store closures due to COVID-19 during March, April, and May, adult-use cannabis sales in Massachusetts still reached $379 million in the first eight months of 2020. While the Massachusetts market is considerably smaller when compared to other legal cannabis markets, sales have managed to grow 53% between January and August, from $52.0 million to $79.6 million. Massachusetts also stands out among other US cannabis markets with the largest average basket size this year at $96.34. To keep track of the Massachusetts cannabis market and see how trends are changing, get access to the industry's leading data set by signing up for a free Insights Pulse account.

Methodology

Data for this report comes from real-time sales reporting by participating cannabis retailers via their point-of-sale systems, which are linked to with Headset’s business analytics software. Sales data is cross-referenced with our catalog of over 500,000 products to provide detailed information on market trends. Headset’s data is very reliable, as it comes digitally direct from our partner retailers. However, the potential does exist for misreporting in the instance of duplicates, incorrectly classified products, inaccurate entry of products into point-of-sale systems, or even simple human error at the point of purchase. Thus, there is a slight margin of error to consider.

Total cannabis sales by state

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Massachusetts adult use sales from January through August 2020 ranks the lowest compared to the other legal markets shown in this graph. This shows that the complete shut down of all cannabis stores in Massachusetts had a significant impact in total cannabis sales. It is also important to note that sales for both Oregon and Michigan include medical as well as adult use cannabis sales.

Monthly cannabis sales by state

This graph further shows how much of an impact the COVID shut down had on Massachusetts compared to other markets. Prior to COVID closures, Massachusetts had a comparable sales volume to Nevada. After cannabis stores reopened in Massachusetts in May, sales have not only surpassed Nevada sales, but now Massachusetts sales are more comparable to sales in Oregon as of August 2020.

Total monthly sales in Massachusetts

Massachusetts started 2020 with slow sales growth from January to February before entering the COVID shut downs of cannabis stores in May. After stores opened in May, however, pre-COVID level sales were reached with rapid growth seen shortly after. In the months of July as well as August, Massachusetts has seen a higher number of sales than in months prior to April.

Cannabis sales growth

This graph compares Massachusetts to Washington and Oregon, two West coast markets where cannabis stores remained open throughout the COVID pandemic. From this graph we can see just how wildly the Massachusetts market swung with the closure and reopening of cannabis stores, with sales increasing significantly after May. In comparison, sales in both Washington and Oregon stayed rather flat in their month-over-month growth rates.

Category market share by state

Comparing category share across different markets can show both what makes markets similar, and where they are unique. Focusing on Massachusetts, we see that this market has the highest share in Pre-Rolls and the second lowest share in Flower after California. The share of Concentrates is also the second lowest after Nevada.

Category market share by month

When looking at Massachusetts category share over time, some interesting trends emerge. Flower category share has increased from 43-45% prior to COVID closures to 48-53% after stores reopened, with the trend continuing to increase. Pre-Rolls, on the other hand, have lost about 10% in share between January and August, but Vapor Pens have increased their share with an additional 5.6%.

Average basket size

Massachusetts stands out among other U.S. cannabis markets with the largest average basket size as of August 2020, at $96.34. That’s about 3 times larger than Washington’s average basket size of $32.56, which is the smallest basket size of any state.

Conclusion

When looking at total sales by state from January to August 2020, Massachusetts seems to have the smallest market overall. When taking a closer look, however, it is apparent that COVID-related closures in Massachusetts had a significant impact on cannabis sales. When compared to other states, Massachusetts had the most month-over-month growth rate after cannabis stores reopened towards the end of May. It will be interesting to continue to monitor cannabis sales in Massachusetts and see if and when trends start to stabilize. If you would like to keep an eye on the Massachusetts cannabis market, sign up for a free Insights Pulse account today.