Illinois Surpasses $1+ Billion of Cannabis Sales in 2022

Sep 12, 2022

So far this year, we have noticed a downwards sloping trend for overall interest in Illinois’ recreational cannabis market (the trend is based on the number of information requests we receive from readers for the state).

Although we are not overly surprised by the lower amount of interest in Illinois (partly because we have noticed a similar trend across the United States), the size of the decline greatly exceeded our forecast.

Earlier this month, Illinois’ Department of Financial and Professional Regulations (IDFPR) reported approx. $129.4 million of recreational cannabis sales in August. When compared to July, the amount of recreational cannabis sold was approx. 5% lower, however, the state generated more sales on a year-over-year basis.

After analyzing the performance of Illinois’ recreational cannabis, one metric stood out to us. The data point we want our readers to be aware of is items sold since it can be used to determine the average cost per item sold in the state.

When comparing the performance Illinois’ recreational cannabis on a year-over-year basis, we notice a more than 360,000 increase in the number of items sold. During August, the average price of each item was approx. $42.25. This amount is down from approx. $45.12 in August 2021 and we find the decline to be significant.

Although we are specifically focusing on the performance of Illinois’ recreational cannabis in August, the lower cost per product trend has been consistent so far this year. A few months ago, we highlighted this concern in an article and want our readers to be aware of the trend.

Our main takeaway from Illinois’ performance data is that saturation is starting to impact margins and we believe this could be a headwind for multi-state operators (MSOs) which are levered to it. We consider the combination of a lower average product sale and higher inflation to be a recipe for trouble and will monitor how companies respond to the trend.

https://technical420.com/cannabis-article/illinois-surpasses-1-billion-of-cannabis-sales-in-2022/#