Worcester Business Journal

12 Worcester Business Journal | June 12, 2023 | wbjournal.com when the legacy black market was known to offer much lower prices, consumers ultimately turned out, with dispensaries reporting $500 million in adult-use sales in the first full year that adult-use sales were open, according to the CCC. e regulatory body's tracker now reports annual adult-use sales in the billions. As of May 21, the CCC reports $4.56 billion in gross adult-use sales since November 2018, with more than half a billion of those dollars coming in in the first five months of 2023, alone. Meanwhile, the average price of a gram of flower is $6.05, a 57% decrease from when dispensaries first opened. But as the adult-use market embeds itself into daily life in the commonwealth, the pressure is on for cannabis companies to provide customers with the products they want at the best possible price, resulting in what local owners are calling a race to the bottom. FOCUS B U S I N E S S O F C A N N A B I S Retail is king Smaller cannabis companies are white labeling and collaborating as they try to survive a fierce pricing competition against large corporations in an increasingly saturated market BY MONICA BENEVIDES Special to WBJ T he times when customers used to be shuttled from offsite parking lots to dispensary doors feels like a cannabis market creation myth. With 286 adult-use dispensaries open in Massachusetts, finding cannabis for purchase is as increasingly simple and straightforward as buying a six- pack of Sam Adams. at market saturation is bringing with it a host of challenges, especially for smaller and locally-owned cannabis companies competing with larger, multistate operators. e battle for survival – and dominance – is playing out on shop shelves and at cash registers. "e retailers really have all the control," said Kevin MacConnell, co-owner of Yamna, a cannabis microbusiness based in Uxbridge. is November, adult-use cannabis sales will have been online for five years in Massachusetts. In the early days, consumers traveled to one of only a handful of open adult-use dispensaries — the first two opened on the same day in Leicester and Northampton — and were subjected to a myriad of obstacles, including shuttle buses, lengthy outdoor lines, and little to no ability to casually browse products. Going to the dispensary was an event in and of itself; a novelty. Back then, the retail price for a gram of cannabis flower hovered just above $14 a gram, according to historical data from the state regulatory agency Cannabis Control Commission. While there was a lot of crosstalk about whether customers would pay the premium for regulated, legal cannabis Annual adult-use cannabis sales in Mass. *Through May 28, 2023 Source: Massachusetts Cannabis Control Commssion 0 $0.3 $0.6 $0.9B $1.2B $1.5B 2019 2020 2021 2022 2023 Annual revenue $0.5B $0.7B $1.3B $1.5B $0.6B Bud's Goods & Provisions opened its Worcester dispensary in 2020. Yamna co-owners Kevin MacConnell (left) and Tim Phillips (right) have begun partnering with other cannabis businesses in order to remain competitive as prices drop. Here they are with entrepreneur and former "Shark Tank" star Kevin Harrington, who is the strategic adviser for Westborough firm Cannaprenuer Partners, which helps professionals navigate the marijuana industry. PHOTO | COURTESY OF BUD'S GOODS & PROVISIONS PHOTO | COURTESY OF YAMNA

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