To compare impacts of COVID on Medical and Adult-Use markets, this analysis focuses on three US markets that offer both: Colorado, Michigan, and Oregon. Oregon and Colorado are mature in both Medical and Adult-Use and Michigan is a new Adult-Use market with a longer Medical Market history. We specifically examine the period between December 2019 - November 2020, which covers the initial COVID-19 shock and allows us to analyze the actual state-reported figures (as opposed to Headset forecasts) for all three markets.
As we can see in Oregon and Colorado, Medical Market sales, while lower than Adult-Use sales, do not show any rapid downward trend. The Colorado Adult-Use market grows fairly rapidly during the summer months, but that is the typical seasonal pattern for the market. To help us understand what might have happened during COVID outbreak in particular, it is better to look at Medical sales as a percent of the total legal cannabis market.
When we take a closer look at what happened in these more mature markets, we see that Medical cannabis share grew temporarily as percent of total either during COVID, as in Colorado, or shortly after COVID, as in Oregon. The percent of shares have since returned to their "normal" levels. The interesting question is why this might be? There are some studies that suggest Medical Cannabis is used more to relieve anxiety and help deal with variety of health issues, as well as lack of health care access, during a pandemic. So perhaps that is what we are seeing here.
As mentioned, Michigan is a new Adult-Use market. Therefore, we wouldn't necessarily expect the relationship between Medical and Adult-Use Cannabis sales behave the same as in OR and CO. Instead volume is reallocated from Medical to Adult-Use in MI.
This is likely happening because Adult-Use access allows more choices and doesn't require a prescription for consumption. As a percent of total, the trend for Medical has been consistently downward, and is likely to continue.
It's clear that in the wake of COVID, the Michigan cannabis market reacted drastically different from more mature Adult-Use and Medical markets like Oregon and Colorado. Since Adult-Use cannabis has been introduced in Michigan, Medical sales have been steadily decreasing and this trend is likely to continue. We'll be keeping an eye on Medical markets over the coming months, so be sure to stay tuned for more updates. Want to keep track of recreational cannabis sales trends? Sign up for a free Insights Pulse account.