WASHINGTON: After another quarter of legal recreational cannabis sales on the books for Washington State cannabis businesses are still faced with many unknown factors that will impact their businesses in the upcoming months. Legislative changes, surplus inventories and continuation of local bans and moratoriums are a few of the major factors that will be driving forces in how the market grows this year.
With so many pieces of this complex puzzle at play it is highly critical for businesses to understand the market performance, the current dynamics and the insights that can be gained from what we do know. At the end of 2014 Analytically Correct conducted the only market forecast for the Washington State Cannabis Industry, published in the MJ Research Report in January. Let’s take a look at how the market has performed to this forecast through one quarter of the year.
Overall, the market has performed well on a strong, predictable growth trend. Analytically Correct’s forecast for 2015 was for $350M to $495M in combined producer processor retailer sales and through the first quarter the state in on course for $450M.
First quarter 2015 sales actuals totaled $73.5M which is right in line with of the forecast range of $56.7M to $81.8M. While actuals for the quarter came in well within the expected range the surprise for me is how well it performed in the first quarter coming off of fall harvest with surplus inventories, not enough retail stores and an expected down season cycle. Given these factors it would be reasonable to have expected the quarter results to be towards the bottom end of the range. These results give an optimistic outlook for the year could result in an upward revision of the forecast if it continues through the second quarter.
It is important to note that he forecast assumes that sales continue on the current track within an unchanged state legal structure. Action from Washington State legislature or federal government, unstable/unobtainable pricing, change in the rate of license approvals from the LCB, prevention of business operations by counties or municipalities, etc. all could have an impact on actual sales (some of which could be positive impacts). Here are some other key insights from the forecast:
- The forecast predicted over $1M in average daily combined producer, processor and retailer sales by July 2015 (95% statistically confident). March averaged ~$970K per day in sales and it is highly likely that by the end of April average daily sales will surpass $1M per day.
- The forecast predicted approximately 250 active retail stores in operation by the end of 2015 (95% statistical confidence interval for the forecast ranges from ~225 to ~275). With 137 licensed stores and 120 with recorded sales the state is on track for 250 by year end.
- The volatility in daily sales has stabilized so far this year. We are seeing normal day of week sales swings following the pattern of most sales on Friday and least on Sunday and have not experienced drastic swings that were seen in 2014.
If you are a producer, processor or retailer who would like to be a confidential data provider for the dashboard and receive custom business insights or would like more information about business intelligence and analytics feel free to contact Joe at firstname.lastname@example.org.
About Joe Armes: Joe is the founder of Analytically Correct, a data analytics services company that provides custom analytics solutions that transform data into insights to allow decision makers to focus on what adds most value. His passion is to work with organizations with deeply rooted causes to help them gain access to the knowledge needed to make timely and informed decisions.