A new report released today shows that licensed marijuana stores are as profitable as Starbucks stores, if only they were taxed at the federal level like Starbucks, Apple, and other high-end specialty stores. Cannabis dispensaries could average a 12% after-tax profit margin, which is in line with the top profit margin specialty retail stores like Starbucks. The findings are published by Arcview Market Research in a new report titled “Cannabis Retail: The $23 Billion Opportunity,” and are based on an analysis of BDS Analytics’ GreenEdge point of sale data.
“This report shows that retail cannabis could be as big as the iPhone. It’s clearer than ever that there is a pot of gold at the end of the rainbow for those investors and operators who are willing to deal with the uncertainties and difficulties of current regulations,” said Arcview CEO, Troy Dayton.
“Cannabis stores are unlike anything the retail world has seen since big-box stores wiped out much of the specialty store business in the 1990s,” said Arcview Market Research Editor in Chief, Tom Adams. “And because of federal prohibition, publicly traded retail companies are just going to have to stand aside while entrepreneurs pursue this unique retail opportunity.”
The report also includes:
- Detailed sample retail P&L’s illustrating the impact of the 280e IRS rule that keeps cannabis business from deducting certain expenses on profitability, how retailers are coping by “absorbing overhead” into cost of goods.
- Competitive retail landscapes in nascent medical markets, like Florida and Michigan, and those poised to transition to adult-use, such as Massachusetts and Canada.
- Key insights into top retailers’ strategies in mature adult-use marketplaces like Colorado and Washington.
Other findings include:
- Adult-use markets will be nearly twice the size of the medical market by 2021, with $14.9 billion in sales.
- Dispensaries have average per-store revenues close to $2 million.
- The $6.7 billion legal North American market is only 12 percent of the $56.1 billion overall cannabis marketplace.
This retail report is the most recent installment of the Cannabis Intelligence Briefing series, produced by The Arcview Group in partnership with BDS Analytics. The report is available on its own for $297, or the reports can be obtained as part of the Cannabis Intelligence Briefing subscription, which includes the 5th edition of The State of Legal Marijuana Markets annual report and its upcoming Mid-Year Update (a $597 value), for $1,975 for all 10 reports.
Source: 420 Intel – United States