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Cannabis Sales In Steep Decline As Pandemic Restrictions Ease

Cabin fever is good for weed sales, which hit record numbers during the pandemic. But those levels are now plummeting

Market Realist

Cabin fever is certainly good for weed sales. Marijuana sales hit record numbers during the height of the COVID-19 pandemic, reports Newsweek. But those stratospheric levels have plummeted in recent months as coronavirus infections in the U.S. have also fallen.

Marijuana Business Daily reports many marijuana industry bigwigs have seen the correlation between weed sales and COVID restrictions easing in the U.S. The suits noted people had more idle time at home when bars and other businesses were shuttered in many areas. Some even found themselves with a little extra income as well.

Many of those bored folks turned to marijuana products. In fact, MJBizDaily found year-over-year total sales increased an eye-popping 777 percent(!) from 2019 to 2020.

Coming Down

But the marijuana industry is now coming down from that high, according to the numbers.

A report released earlier this month from data analytics firm BDSA found 2022’s sales to be off to a slow start after a strong holiday season. Even Cali had a sales dip, with January sales falling almost 10 percent from December and by more than 12 percent from the previous year.

But most industry analysts don’t expect this trend to continue for long. BDSA says weed sales could reach past $28 billion in 2022 with more states allowing recreational use. The analytics firm adds California will likely continue as the big dog. The Golden State will probably hold on to the top spot in the US market for the foreseeable future.

“Brisk Growth” Predicted Globally In 2022

“Though most legal cannabis markets saw sales soften in the second half of 2021, the global cannabis market is expected to see brisk growth in 2022, driven by strong sales in new and emerging markets in the U.S., steady growth in Canada and international markets led by Mexico and Germany,” BDSA’s Jessica Lukas said.

Another state showing the steep sales decline for marijuana is Illinois. Legal adult-use sales of Cannabis began in January of 2020 for the state. At first things were hunky dory in the Land of Lincoln. Illinois sold a record $137 million worth of recreational cannabis products last December.

The state then hit an issue of supply not meeting consumer demands. Capitalism 101 means high prices probably caused many consumers to purchase untaxed weed. Illinois’ legal pot shops logged $117 million in sales in January. They collected slightly less than $114 million in February.

Culprits: High Taxes, Cultivation Limits

High taxes in Illinois, as well as limits on who can cultivate marijuana, caused prices to soar, said consultant Andy Seeger, reports WMAQ-TV.

“Right now it’s just a captive market in which the ability to grow…is just really monopolized,” Seeger said.

There’s hope a bigger 2022 harvest could drive prices back down in Illinois after state officials issued 40 craft cultivation licenses last year. The state will award 60 more craft cultivation licenses this year.

But the same broad economic factors challenging other business sectors also affect weed companies. Sales fell as inflation and gasoline prices rose, according to one CEO of a marijuana corporation, reports MJBizDaily.

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