Illinois' booming cannabis market is under the microscope in Pablo Zuanic's latest report from Zuanic & Associates. With dispensary numbers on the rise, how are multi-state operators (MSOs) adapting amidst political changes and industry buzz? Zuanic emphasizes the essential role of thorough industry analytics.
Illinois' Growing Dispensary Landscape
The analysis highlights the issuance of 74 social equity dispensary licenses from October 2022 to February 2024, primarily concentrated in Illinois' densely populated northeast. This marks a significant augmentation to the pre-existing tally of 110 stores, potentially catalyzing market expansion.
The report posits that the relatively lower per capita cannabis spending in Illinois, compared to Michigan, is due to fewer dispensaries and lower product pricing—factors that are set to evolve with these new entrants.
Impact On MSOs
The increasing dispensary count, however, forecasts a dilution in revenue per store for existing establishments, alongside exerting downward pressure on retail prices.
Notably, the majority of these new social equity stores are situated in the greater Chicago area, intensifying competition for MSOs with a significant presence there.
Among the top players, Verano VRNOF, Cresco Labs CRLBF and Ascend Wellness Holdings AAWH emerge as the most affected, with a notable number of new social equity stores encroaching within a five-mile radius of their existing outlets.
Verano faces competition from 19 such stores, Cresco Labs from 18 and Ascend Wellness from 17. On the other hand, Curaleaf Holdings CURLF contends with 13 nearby social equity stores, while Green Thumb Industries GTBIF has a relatively lighter impact with two.
Regional Disparities And Strategic Positions
The report delves into the geographical spread and strategic positioning of these MSOs, revealing a nuanced landscape of competition. Cresco Labs' Sunnyside stores, for instance, have a significant concentration in the northeastern corner of Illinois, placing them in direct competition with a multitude of social equity stores.
Conversely, Green Thumb Industries' Rise stores, despite a similar geographic footprint, face considerably less competition from new entrants.
Curaleaf's strategic placement of its stores in the northeastern part of Illinois, primarily around Chicago, positions it in a competitive stance against 13 social equity stores. Verano's Zen Leaf stores, with a heavy presence in the greater Chicago area, encounter the highest level of competition with 19 social equity stores within a 5-mile radius.
Market Dynamics And Future Outlook
The report concludes with an overview of Illinois' cannabis market dynamics, including sales growth, price trends, and the shifting competitive landscape amidst an increasing store count.
With Illinois' cannabis sales reaching $2 billion, the market exhibits robust growth potential, albeit with challenges such as revenue dilution per store and competitive pressures from new market entrants.
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