While other states around the country continue to reel with price compression, Missouri is bucking the trend to become a bubbling Midwest marijuana powerhouse. Brand count is low, price averages are high, and discounts are few – a recipe for success, on paper.
From February to September, sales in the Show-Me State approached a staggering $953 million, rivaling long-established markets like Colorado and Massachusetts, according to a report by cannabis market analysis firm Headset.
While flower continues to reign across markets, Missouri has seen an unusually high demand for the category, with “a market share that is 7.6 percentage points higher than the national average of 40.2%,” Headset reported.
The market’s robust sales are accompanied by a limited brand presence. Missouri currently boasts fewer cannabis brands than many other states, which translates to less competition. That likely contributed to the state’s elevated cannabis prices. According to Headset, the average item in a Missouri cannabis store is priced at $33.22, in stark contrast to Washington state’s $13.06, currently the lowest average in the country.
By BDSA’s calculation, the average retail price for cannabis in Missouri last month was $14.14, marking a notable difference versus the $9.16 average in markets the firm tracks. Nonetheless, Missouri’s prices were still below those of newer adult-use markets like New Jersey, where the average stood at $18.77.
Following the introduction of adult-use sales in February, Missouri experienced a consistent rise in cannabis prices, but now data from BDSA indicates that the state’s prices are beginning to stabilize. BDSA Retail Sales Tracking reported a 4.4% decrease in the equivalent average retail price from July to August, marking the first decline since the start of adult-use sales.
However, even with higher prices, Missouri retailers have been less aggressive in offering discounts. On average, discounts in the state are half of what is seen nationally.
“The market has resisted major pricing compression, allowing retailers and brands to retain margin and fuel expansion,” Headset wrote. However, analysts note that as the market matures and more brands establish a foothold, consumers likely can expect a shift in those pricing trends.
By BDSA’s count, there were 203 total brands in the Missouri market in August, up from 187 brands in January, the last full month of medical-only sales.
“This brand count is significantly lower than some mature markets (such as Michigan which had 418 brands in August), but it is still higher than emerging markets with restricted licensing, such as New Jersey, which had only 85 brands in August,” Brendan Mitchel-Chesebro, an analyst with BDSA, told Green Market Report.
For now, the current scenario offers high profitability, though rising competition from new entrants and possible regulatory shifts could alter the playing field.
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