Missouri has had a strong start in the last eight months since the beginning of adult use in February. It has quickly become the sixth-largest market among Headset's tracked markets in the US, alongside Massachusetts and Colorado. As an emerging cannabis market, Missouri faces both opportunities and challenges, and we have the data to shed light on the state's progress. In this report, we will explore key insights, such as the market size, product categories, brand count, pricing, and discounting trends in Missouri. Let's delve into the details and gain a deeper understanding of this promising market.
Data for this report comes from real-time sales reporting by participating cannabis retailers via their point-of-sale systems, which are linked up with Headset’s business intelligence software. Headset’s data is very reliable, as it comes digitally directly from our partner retailers. However, the potential does exist for misreporting in the instance of duplicates, incorrectly classified products, inaccurate entry of products into point-of-sale systems, or even simple human error at the point of purchase. Thus, there is a slight margin of error to consider. In this report, we examine sales from US Headset Insights markets. This includes AZ, CA, CO, FL, IL, MA, MD, MI, MO, NV, OR, and WA.
Missouri is the sixth largest Headset tracked US market with $953M in total cannabis between February and September 2023 comparable to Colorado and Massachusetts.
Flower is overrepresented while Pre-Rolls are underrepresented in Missouri compared to the national average.
Missouri has one of the lowest brand and product counts in the country along with other new adult-use markets. The number of brands in the market is 82% less than similarly sized Washington.
The average item price in Missouri is 57.2% higher than the average of the rest of the US markets making it one of the more expensive cannabis markets in the US
Missouri’s discount rate is half of the national average (10% vs 20%). The market has resisted major pricing compression allowing retailers and brands to retain margin and fuel expansion.
Since the start of Missouri's recreational cannabis market in February, it has quickly risen to become the sixth-largest market among Headset's tracked US markets. From February to September 2023, Missouri achieved $953 million in total cannabis sales, surpassing Colorado's sales of $927 million and closely trailing Massachusetts' sales of approximately $1 billion. As an emerging market, Missouri has experienced significant initial growth as it meets the pre-existing demand following legalization. Moving forward, we can anticipate continued growth in the near future, followed by a transition to a more sustainable growth pattern. It is important to note that this growth trajectory is consistent with trends observed in similar states.
Missouri, as a fresh market, exhibits a dynamic product category landscape. In the first seven months of legalization, it is evident that Flower and Pre-Rolls deviate the most from the national average. Flower, which dominates in terms of total sales, holds a market share that is 7.6 percentage points higher than the national average of 40.2%. Conversely, Pre-Rolls, although the third most popular category in the US, rank fourth in Missouri and fall 5.2 percentage points below the national average of 13.7%. This presents a notable opportunity for brands seeking to capitalize on the underrepresentation of Pre-Rolls in Missouri. As one of the industry's most promising categories, Pre-Rolls are expected to gradually gain traction and erode Flower's market share as the state's figures align with national averages. For further insights on this thriving category, refer to the Pre-Rolls industry report.
Brand & Product Count
Since the start of adult use in February, Missouri has had the third-fewest number of brands registering a sale through September compared to the rest of our tracked US markets. With only 199 unique brands, Missouri's brand count is comparable to other emerging markets such as Illinois (132), which has been slow to develop, and Maryland (105), which began their adult-use market in July. In contrast, a mature market like Washington boasts 1,102 brands, despite being 15% smaller than Missouri. As a result, Missouri has 82% fewer brands in the market, which directly impacts the number of products available on shelves. This trend of low brand counts, as observed in Maryland and Illinois, signifies lighter competition, which subsequently affects pricing dynamics.
Missouri has some of the highest prices in the country comparable to other new and developing markets such as Maryland and Illinois. The average item price in Missouri is 57.2% higher than the average of the rest of the US markets. For comparison, the average item in Missouri costs $33.22 in September 2023 compared to $13.06 in Washington which has the lowest prices in the country. The low brand and product count and therefore competition has allowed prices to stay high. As this very new market develops look for the competitive landscape to grow and therefore drive down prices over time.
Prices are high in Missouri and while the number of units per basket is somewhat close to the national average (2.1 vs 2.6) the average basket size in Missouri is 33.7% higher. However, prices have been somewhat stubborn in the short time that recreational cannabis has been up and running. Since February basket size has only fallen 7.2% resisting the broad market trend of pricing compression. As a result of the high sales volume retailers have not had to discount to the level that we have seen nationally. Since February, the average discount rate across US markets excluding Missouri has been 20% while in Missouri it has been half that. With an average discount rate of 10% and high prices, there is a lot of margin in Missouri to fuel expansion.
There is significant potential in one of the nation's newest recreational markets. Missouri's market size is relatively large compared to the overall landscape of the United States, providing ample room for additional competition in the Show-Me State. Strong demand and high prices create favorable conditions, with emerging categories like Pre-Rolls offering untapped opportunities. However, it is crucial for operators in the state to learn from the broader market and approach growth strategically. Building a resilient business that can adapt to future challenges is paramount, rather than pursuing reckless expansion to capitalize on the current moment. It is important to recognize that prices will not remain at these levels indefinitely, and Missouri's current advantage as one of the few legal adult-use markets in the region may change in the future. By understanding their business and industry trends, operators in the state can establish enduring and successful enterprises. Headset is committed to supporting the next generation of US cannabis companies by enabling operational efficiency, providing valuable insights, and supplying the data necessary to stay ahead of industry trends.