There's one market that has dominated my conversations with cannabis insiders recently: Pennsylvania. A lot of national attention is given to New York and New Jersey, and what the future might hold for those major East Coast population centers. Illinois also earns a lot of fanfare as the Midwest stronghold. And, of course, we have those densely packed, sunny bookends of the U.S. - California and Florida. But the blue-collar state of Pennsylvania often gets lost in the discussion. And yet, this is an opportunity everyone I know in the industry is excited about. If you're paying attention, you've started to see the number of deals in this state quietly pick up. The first medical cannabis sales in Pennsylvania began in 2018. And in 2019, sales skyrocketed 280% to $450 million - blowing past expectations. Today, Pennsylvania has more than 300,000 patients enrolled in its medical cannabis program as it expands the list of eligible conditions. And expectations are for 2020 sales to come in between $675 million and $800 million. That means medical cannabis sales will go from zero to nearly $1 billion in a little more than three years! But all eyes are on the opportunity for adult-use in Pennsylvania. It's the sixth most populous state, with more than 12.7 million Americans calling it home. Currently, more than 60% of the state's population is in favor of legalizing recreational use. And there are multiple pending bills about the matter in Pennsylvania's legislature. This is why we've started to see a number of pushes and expansion of operations into the state by cannabis companies, including Innovative Industrial Properties (NYSE: IIPR). |
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