Retail prices vary widely across the medical markets, with Virginia boasting double the levels found in Connecticut.
By Nicolas Jose Rodriguez
In a recent analyst note, Cantor Fitzgerald analyst Pablo Zuanic reviewed the retail price differences in cannabis flowers across 14 states (six with recreational and medical sales, and eight with medical-only sales).
The range, from lowest to highest, was as follows: Connecticut was $9.75 per gram (the whole flower, taking 3.5g formats);Florida $11.97;New York $13.70;Ohio $13.83;Maryland $13.89;New Jersey $14.95;Pennsylvania $15.62;Virginia $18.60.Why Is Cannabis So Cheap In Connecticut? Retail prices vary widely across the medical markets, with Virginia boasting double the levels found in Connecticut.
“The CT example is surprising, and we made sure to exclude second cuts and grind. There are only four licensed growers in CT, and only 17 medical dispensaries opened at present. But it seems supplies are plentiful relative to demand. We say this because the five stores that we surveyed in CT had a combined 246 SKUs of flower in 3.5g formats, which is well above most of the other medical states that we surveyed ex PA and MD (NY 22; FL 82; VA 88; OH 171; NJ 239; PA 427; MD 516). The lower prices may be reflective also of the quality available,” Zuanic wrote. Florida Weed Is Cheap Too Excluding CT, FL had the lowest flower prices among the medical markets surveyed by Cantor.
Zuanic assumes this is partly related to the increased price competition in the state, although it does not have historical data to use as a benchmark.
“The state has 391 stores, which is the highest among the medical states that we surveyed; at 18 stores per 1 million people, FL is above MD (16), PA (11), OH (5), CT (5), NJ (2.7), NY (2.1), and VA (0.7). We do not think the increased store count necessarily and solely explains the lower prices; it probably also has to do with increased capacity and slower growth in the state program’s patient count (+3,000 per week vs. +5,000/week in 2Q),” Zuanic explained in the report. Middle Of The Road New York, Ohio, and Maryland are in the same price range ($13.70-$13.90). He noted that prices are similar in Maryland and Ohio, although the MD market is more developed ($550Mn pa vs. $390Mn), with more sales, stores, and SKUs.
Zuanic explained that in NY, the legal industry has to compete with a large illicit market, which he thinks, explains NY prices being 26% below VA (a state that also only recently approved the sale of the whole flower).
“NY just began selling whole flowers, but supplies remain scarce. Yes, there are 40 med stores in the state, but we only counted 22 whole flower SKUs in the five stores surveyed (the five MD stores we surveyed had >500).” New Jersey And Pennsylvania Zuanic estimates New Jersey’s medical sales at $375 million on an annualized basis, while Headset estimates Pennsylvania’s at $1.18 billion per annum. About 3% of the PA population are active patients compared with 1.3% in NJ.
Zuanic found medical prices in PA to be the highest (for flower) among the medical states except for VA. He noted this “reflects a vibrant med market in PA for quality whole flower (pop penetration).”