Cannabis Sales in Illinois Spike in December but That is Not the Full Story... - Technical420

Illinois’ recreational cannabis industry ended 2022 on a positive note as sales surged higher when compared the prior month.

According to Illinois’ Department of Financial and Professional Regulations (IDFPR), the state sold almost $144 million of recreational cannabis products in December. When compared to the prior month, the amount of recreational cannabis products sold increased by more than 10% and we find this to be significant.

When comparing the performance of Illinois’ recreational cannabis industry in November and December on a year-over-year basis, the state recorded a larger spike in sales in 2021. Even though the sales increase from November to December was larger in 2021, Illinois generated approx. $7 million more revenue from the sale of recreational cannabis products in December of 2022.

Although the headline sales number is attractive, the cost per product sold in December was higher in 2021 than it was in 2022. In 2021, the average price per recreational cannabis product sold in December was approx. $42.50. In 2022, the average price fell to $41.75 and we will monitor this metric in future months.

What Changed Between 2021 and 2022

In 2022, Illinois reported more than $1.5 billion of recreational cannabis sales. This amount is approx. $180 million higher than what was reported by the IDFPR in 2021 and we are favorable on the growth of the market.

When analyzing the performance of the state’s recreational cannabis industry on a year-over-year basis, we noticed similarities to what we found when comparing the average price of each recreational cannabis product sold in December of 2021 and 2022.

In 2021, the average price per recreational cannabis product sold in Illinois was approx. $45.45. In 2022, the average price fell to approx. $42.60 and we believe the lower prices are a sign of market saturation.

We Remain Bullish on Illinois

Although we are bullish on the long-term opportunity in Illinois, the market seems to overlook the operators who are levered to it. After recreational cannabis was legalized in Illinois, we saw a massive spike in interest in the market from multi-state operators (MSOs).

We believe the rush of companies that planted a flag in Illinois’ cannabis industry have saturated the market and are of the opinion that certain operators appear to be better positioned than others in the state.

During the last year, we have observed a slowdown on the merger and acquisition (M&A) side of the cannabis industry and Illinois has been impacted by the trend. We will monitor how this trend continues in 2023 and continue to have a favorable outlook on the opportunity for cannabis businesses and brands in Illinois.

If you are interested in learning more about companies that are levered to Illinois, please send an email to support@technical420.com with the subject “Illinois Cannabis Operators” to be added to our distribution list.

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