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Cannabis Sales in Illinois Spike in December but That is Not the Full Story…

Jan 11, 2023 • 9:57 AM EST
6 MIN READ  •  By Michael Berger
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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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Any Content posted regarding a Profiled Issuer is not a solicitation or recommendation to buy, sell or hold securities. We cannot and do not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. All information should be independently verified. We are not responsible for errors or omissions in our publications, and any opinions expressed are subject to change, without notice. We do not, nor are we under any obligation to undertake due diligence or investigation or authenticate and verify whatsoever regarding Profiled Issuers or any Content posted in relation thereto and we do not receive any verification from the Profiled Issuer regarding the Content we disseminate. Similarly, while we endeavor to facilitate the provision of quality information, we are not responsible for any loss or damages caused or alleged to have been caused by its use nor verify or authenticate or update such information.

This article contains forward-looking statements within the meaning of applicable securities laws. All statements that are not historical facts, including without limitation, statements regarding future estimates, plans, programs, forecasts, projections, objectives, assumptions, expectations or beliefs regarding future performance are “forward-looking statements”. Forward-looking statements can be identified by the use of words such as “expects”, “does not expect”, “is expected”, “believes”, “intends”, “anticipates”, “does not anticipate”, “believes” or variations of these words, expressions or statements, that certain actions, events or results “may”, “could”, “would”, “might” or “will be” taken, will occur or will be realized. Such forward-looking statements involve risks, uncertainties and other known and unknown factors that could cause actual results, events or developments to differ materially from the results, events or developments expected and expressed or implied in such forward-looking statements. These risks and uncertainties include, but are not limited to, dependence on obtaining and maintaining regulatory approvals, including the acquisition and renewal of federal, provincial, state, municipal, local or other licenses, and any inability to obtain all necessary government authorizations, licenses and permits to operate and expand the Company’s facilities; regulatory or policy changes such as changes in applicable laws and regulations, including federal, state and provincial legalization, due to fluctuations in public opinion, industry perception of integrative mental health, including the use of psychedelic-assisted therapy, delays or inefficiencies or any other reason; any other factor or development likely to hamper the growth of the market; the Company’s limited operating and profitability track record; dependence on management; the Company’s need for additional financing and the effects of financial market conditions and other factors on the availability of capital; competition, including that of more established and better funded competitors; the impact of the Russia-Ukraine conflict on the global economy; the continued impact of the COVID-19 pandemic; and the need to build and maintain alliances and partnerships, including with research and development companies, customers and suppliers. These factors should be carefully considered, and readers are cautioned not to place undue reliance on forward-looking statements. Despite the Company’s efforts to identify the main risk factors that could cause actual measures, events or results to differ materially from those described in forward-looking statements, other risk factors may cause measures, events or developments to materially differ from those anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in forward-looking statements. The Company does not undertake to revise forward-looking statements, even if new information becomes available as a result of future events, new facts or any other reason, except as required by applicable laws

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Authored By

Michael Berger

Michael Berger is Managing Partner of StoneBridge Partners, LLC and Founder of Technical420.com. Prior to entering the cannabis industry, Michael was an Equity Research Analyst at Raymond James Financial covering the Energy Sector. Michael has been featured in publications such as The Street, Bloomberg, US Money News, and hosts various cannabis events across North America.

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