May 18, 2022
Cannabis sales in the United States (US) have been steadily increasing and we attribute the growth to the rising number of states that allow for the sale of recreational cannabis.
From Illinois to Arizona, there are several burgeoning recreational cannabis markets in the US and we are favorable on the trend. Over the next year, we expect additional states to begin to allow for the sale of recreational cannabis and believe the US is in the early innings of a hyper growth cycle.
An interesting trend we are noticing in states that allow for the sale of recreational cannabis is related to declining medical cannabis sales and we will monitor how this dynamic changes as the industry matures.
Earlier this week, Arizona’s Department of Revenue released cannabis sales data for March and we are impressed with the growth that was reported. In March, the state reported less than $50 million of medical cannabis sales. This marked the first month where medical cannabis sales were below that level since the opening of Arizona’s recreational cannabis market.
According to Arizona’s Joint Legislative Budget Committee, cannabis taxes in March were higher than the amount of taxes generated from the sale of tobacco and liquor combined. We consider this to be an important milestone for the state and believe this metric speaks volumes to the benefits of legalizing cannabis.
During the last year, the cannabis sector has been under considerable pressure and we believe the recent weakness is overdone. With momentum rising for pro-cannabis legislation, we are of the opinion that the US cannabis industry is about to reach an inflection point. Following the recent weakness, we find valuations to be much more attractive and remain bullish on the long-term potential that is associated with the sector.
https://technical420.com/cannabis-article/arizona-is-showing-signs-of-a-rapidly-maturing-adult-use-cannabis-market/
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