It is undisputable, that the sale of medical and recreational marijuana has been a positive contributor to the economic development of the state of Maine, since its legalization in 2016. Not only has the industry created hundreds of direct and indirect jobs and revitalized local economies, but it has also represented increased tax revenues for the state as well. In the year 2022, the state collected a total of $25.3 million dollars in tax revenues, part of the $3 billion plus collected by state governments across the country that have legalized medical or recreational use. Although not as robust as the $7 billion California cannabis market, Maine’s $300 million market makes it the nineth biggest market in the United States, and one of the biggest in the world. Considering that the industry is in its infant stages, it is clear that it is going to become a key component of the economic development engine of the state and the nation.
Source: Christy Bieber. “Marijuana Tax Revenue: A State-by-State Breakdown.”
From a global market perspective, Maine’s position continues to be a privileged one considering that 96.8% of worldwide sales of legal cannabis take place in North America.
Within this regional market, it remains a relevant force, taking into account that the $6.9 billion Canadian market, remains much smaller than even the California market. Canada’s 1/10 population ratio compared to the United States results in smaller provincial cannabis markets that look more like Maine’s. The province of Alberta, for example, one of the largest recreational cannabis markets in Canada, recorded sales of $717 million in 2021 while British Columbia recorded sales of $552 million, and the Maritime provinces combined ended that same year with total sales of $260 million. Maine’s $300 million industry not only surpasses the Maritimes region as a whole, but has a larger per capita customer base ratio than Alberta and British Columbia considering that both provinces have three times the population of Maine.
Maine’s market, when compared to other countries outside of North America that have legalized production and consumption, dwarfs the competition. Total sales in the Netherlands reached $104 million in 2020 followed by the second biggest market, Uruguay, that reached sales of $3.5 million during that same year. This U.S. – Canada monopoly therefore benefits small players like Maine.
In just seven years, Maine’s cannabis value of production surpassed all other historic crops, including potatoes and blueberries. The $300 million cannabis market was greater than the $259 million potato and the $55.5 blueberry markets. The industry’s trend indicates future growth, more so considering that cannabis is currently protected by local laws and regulation that impede not only state-to-state but exposure to global competition as well. Incredibly but true, while Maine’s potato industry continues to fight for survival in a tight and highly competitive domestic market and the blueberry market faces the challenges of a rising Peruvian market, the cannabis industry remains protected and isolated from these challenges.
Although agricultural production represents just 5 percent of the state’s GDP, the rising trend of cannabis sales indicates that, in the near future, it will become a larger contributor to this sector of the economy as well as the general state’s GDP. More so, considering that, as a result of the current protectionist measures imposed by state and federal legislation, the more dollars generated by the sale of recreational and medical cannabis the more money that stays in the local economy and ultimately re-spent within the state. This multiplier effect will turn the cannabis industry into an even more important component of the state’s future economic development strategy.
The more the federal government delays the national legalization of medical and recreational marijuana, the better for Maine. It is therefore a market opportunity that state legislators must capitalize on. Once this spatial and temporal dimension of history comes to an end, the market dynamics will change, national and global business forces will take over the local market, ultimately ending the potential for re-investment and re-spending within Maine’s economy.
The boom of this rising industry demands a cautious celebration, knowing well that the local market will reach a plateau, that agricultural commodities are volatile, and that the future generations of consumers will not replicate the pallets and desires of current consumers. Nevertheless, it is clear that Maine’s first-mover strategy was the right one, that the future of the industry must be intertwined with the tourist and hospitality industries in order to thrive and survive when the federal regulatory structures change, and that its sustainability lies in value added business strategies designed to keep the dollars circulating locally.
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Feature Image: CRYSTALWEED Cannabis