CHICOPEE, Mass. (WWLP) – In less than five years since cannabis has been legalized in Massachusetts, cannabis retailers across the state have seen more than $4.4 billion in gross sales.
While revenue seems to be remaining on that upward trend, some industry experts are warning about growing pains. The 22News I-Team examines those challenges and explains if we’ve reached the end of the “Green Rush.”
Cities like Northampton have seen the list of pot shops multiply but they anticipate their excise tax revenue this year to be less than 2019, at $975 million. Northampton is not alone.
Since pot was legalized, a number of empty buildings in Holyoke were bought by investors as part of the process of securing a cannabis license, according to Aaron Vega, the city’s Director of the Office of Planning and Economic Development. However, he warns this has become a reckoning year for the industry.
“We’ve seen a lot of the investors already back out. They’re going to the next state that’s legal. When you have something new, it’s always those big guys who come in first, get all that money in first, and then sort of saturate the market, then they’re able to leave and everyone else needs to figure it out,” said Vega.
Over the past few months Connecticut, New York, and Rhode Island have all opened their first recreational pot shops. But as Massachusetts faces one of its first dispensary closures in Northampton and the value of pot in the state has been cut in half, are we seeing signs of an industry reaching its peak?
“We don’t really know whether it’s a bubble or not but what we can say is that there’s more competition so one of the reasons why people may want to exit the market is because there are so many competitors you have to stand out,” said UMass Resource Economics Professor Lucy Xiaolu Wang.
She added this is an industry that requires millions to buy into the business and to maintain it.
Plus, the added layer of licensing as well as minorities who were disproportionately impacted by the War on Drugs facing challenges to enter the industry legally. Professor Wang said Black and Brown people make up roughly 15 percent of marijuana industry in Massachusetts.
Payton Shubrick of 6Brick’s in Springfield is the third Black woman to own and operate her own recreational dispensary in the state. She’s hoping the industry becomes more inclusive.
“If prices continue to drop, we need creative folks coming to the forefront, we need creative companies and that doesn’t happen if everyone looks the same,” remarked Shubrick.
In Easthampton, they’re dropping some of the fees to open up pot dispensaries within the city. Mayor Nicole LaChapelle says she hopes that will make the process more equitable.
“We see that these fees are just one more barrier to smaller operators coming into the market and those smaller operators are really important to a local economy like Easthampton,” said the mayor.
Both LaChapelle and Vega see the marijuana industry heading a similar direction as beer, with the potential for micro dispensaries. Especially as communities like Easthampton prepare to pilot “social consumption.”