State Market Analysis: Is the Maryland Market the ‘Next Big Thing’?
While enormous fanfare currently surrounds hot and developing marijuana markets already in play, like Oregon, Nevada, New York and California, East-coaster Maryland has begun to come into its own a bit more quietly but its market development is not going unnoticed.
Industry watchers, in particular, investors, are watching the state market develop with interest because of the investment climate it is creating for those interested in financing the green rush. There is no residency requirement for those seeking gold in green, unlike many other states.
According to Leslie Bocskor, Managing Partner of Electrum Partners in Nevada, and a long-time industry advocate as well as investor, “It looks like Maryland is getting some things right that others haven’t. They may not have reciprocity as we do in Nevada but still allowing for out-of-state travelers to use local dispensaries is better than anyone else. The number of conditions they’re allowing is relatively broad and their overall approach seems quite sensible.”
His biggest critique? “The biggest single issue I can see is the limit on the number of licensed businesses that can exist. That is probably going to create some challenges. That being said, they’re off to a better start then most.”
Kris Krane, the Managing Partner of 4Front Advisors which invests in marijuana companies nationally, is also intrigued by Maryland’s market. He believes that it is shaping up to be “one of the more robust” markets on the East Coast. Unlike Bocskor, however, Krane believes that the number of initial dispensary licenses allowed by the state—94—is a good start, especially as so far there are an undefined number of production licenses.
That said, he is specifically concerned with the number of cultivation licenses as currently prescribed. “This will make the licensing process for cultivation licenses extremely competitive, with successful cultivation operations from around the country, in addition to new local applicants, all vying to be one of the few selected cultivators in the state,” he said. “This component has only been seen in Illinois, which also has a larger number of dispensary licenses than cultivation permits, but that market is not currently up and running so there is no real way to extrapolate how similar Maryland’s market will ultimately look.”
The state has also left the number of infused product manufacturers undefined. The state’s Medical Cannabis Commission will set the number at a future date based on assessed demand. Given the locale of the state to a healthy tourist economy on its coast as well as wealthy suburbs of Washington, D.C., where medical and recreational use are now legal, this may be one of the most interesting if not high growth niches in a new and exploding market.
As a result, the little market that could, which sits strategically placed in many respects, is quietly establishing an interesting and potentially nationally competitive cannabis trade.
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