Massachusetts is the oldest adult use market in New England. Operators have enjoyed their first-mover advantage within this limited license state. License holders are capped at 100,000 sq. ft. of cultivation and operators cannot own more than three retail licenses.

While the Cannabis Control Commission feigned strict social equity requirements, major MSOs still found their way into the market, building out the maximum three dispensaries allowed per owner. Operators need to secure Host Community Agreements and satisfy a myriad of other state and local regulatory requirements before licenses are issued, which has slowed market development.

March 2023 | MariMed completed its acquisition of Ermont

March 2022 | Agrify Corp. announced a senior secured debt facility for up to $135MM

January 2022 | 4Front Ventures acquired New England Cannabis Corporation for $50MM

September 2021 | Jushi finalized $91MM deal to acquire Nature's Remedy

September 2021 | Ayr Wellness Inc. acquired Cultivauna Inc, the owner of Levia-branded cannabis infused seltzers and water soluble tinctures

September 2021 | Cresco acquired Cultivate in a $90MM deal

June 2021 | GTI acquired Liberty Compassion

October 2020 | Curaleaf acquired Alternative Therapy Group

The Bay State is a profitable, limited license state that is highly attractive to MSOs. As a result of the three dispensary limit, most of the MSOs have already reached their maximum retail presence. This regulation results in numerous profitable small businesses with only a few large suitors left.

Though the state had a slow start to adult-use sales in late 2018, sales have skyrocketed. 2022 finished strong with over $1.6B in sales – Sales through July 2023 have totaled just over $1.0B, well above 2022's sales pace.

If you have an opportunity to invest in a Massachusetts operation, you won't regret it. Strong business opportunities remain in cultivation and in select retail locations, including the underserved Boston area.

If you are an SSO, bide your time, reap the annual earnings rewards, and wait until something changes on the regulatory front to allow for a monetization event.

While there are many strong signs in the state, there is some turbulence being felt resulting from the oversaturation of retail locations. This oversaturation has lead to retail prices being cut almost in half since adult-use first hit the Massachusetts market. Signs point to state-wide consolidation at some point in the future.

Operators should keep a close eye on developments in the state in the back half of 2023 as positive and negative trends are further played out.