NFD TheUSCannabisReport2019

THE
U.S.
CANNABIS
R E P ORT
2 0 1 9 I N D US T R Y OU T LOOK
SPONSORE D BY:
© NEW FRONTIER DATA. ALL RIGHTS RESERVED.

TABLE OF
CONTENTS
L E T T ER F R O M T H E P U B L I S H ER 2
A B O U T N E W F R O N T I ER DATA 5
E X EC U T I V E S U M M A R Y 7
M E T H O D O LO G Y 12
N AT I O N A L OV ER V I E W 16
U. S . M A R K E T D E M A N D 20
K E Y I N D U S T R Y T R EN D S 39
Regulatory Trends 39
Social and Economic Trends 56
Investment Trends 92
K E Y TA K E AWAY S 101
© NEW FRONTIER DATA, ALL RIGHTS RESERVED | NEWFRONTIERDATA.COM | 1

LETTER FROM
THE PUBLISHER highest increases in reported use. Maine and Mary-
land, the two legal adult-use states with the highest
increases, saw consumer usage rise by an average
of 14% annually over the last 5 years. Utah, while
retaining some of the country’s strictest cannabis
laws, saw reported monthly cannabis usage rates
New Frontier Data is proud to present nearly double since 2010 (from 3.3% to 6.5%). The
its latest release, The U.S. Cannabis Report: 2019 growth is perhaps a result of the state's proximity to
Industry Outlook. Colorado, and the neighboring legal market’s influ-
Since the first installment of this report series in ence on local cannabis perception and consumption.
2018, New Frontier Data’s market modeling has New Frontier Data’s mission is to elevate the dis-
evolved to include estimates and projections for cussion around the legal cannabis industry globally
the illicit market. New Frontier Data estimates by providing unbiased, vetted information and
that in 2018 the total U.S. illicit market was worth insight, enabling stakeholders to make educated
up to $64 billion, and projects the existing legal decisions. We provide individuals and organizations
U.S. market to be just beyond $10 billion for that operating in, researching, investing, and regulat-
same year (13.9% of the total national demand), ing the cannabis industry with unparalleled access
underscoring the scale of the U.S. legal cannabis to actionable market intelligence and guidance,
market opportunity. helping each capitalize on the power of big data, and
Despite the prosperity of the illicit market, New succeed in such a fast-paced and dynamic market.
Frontier Data projects that the regulated industry As the global leader in cannabis data and analytics,
will reach $13.6 billion in legal consumer sales by New Frontier Data is dedicated and committed to
the close of 2019. Total legal sales across currently the highest standards of data collection, analysis,
legalized states are projected to grow at a com- and reporting, unmatched in today’s still nascent
pound annual growth rate (CAGR)of 14% over the cannabis research environment.
next six years, reaching nearly $30 billion by 2025.
Please do enjoy our newest report, and harness
Strong growth in public support for legalization the power of predictive analytics to succeed in the
during the past decade — particularly with a U.S. legal cannabis industry.
surge in popularity among adults — indicates that
advancement toward legalization will be a durable,
generational trend. In turn, such societal accep-
tance will further normalize cannabis as more Giadha Aguirre de Carcer
people are willing to explore its medical, wellness, Founder and CEO, New Frontier Data
and recreational applications.
Usage rates have risen at disparate rates nationally,

with states that have recently legalized medical or
adult-use cannabis representing the states with the

DOWNLOAD THE MOST CITED,
VETTED AND TRUSTED REPORTS
IN THE CANNABIS INDUSTRY
FOR FREE!
ACCESS OUR LIBRARY

OF FREE REPORTS
AVAILABLE NOW
ON EQUIO!
Start Your Free Trial at: Equio.io

or email us at: sales@NewFrontierData.com
WE ARE YOUR #1
TRUSTED SOURCE
FOR BULK
INGREDIENTS:
CBD ISOLATE
CBG ISOLATE
FULL SPECTRUM DISTILLATE
BROAD SPECTRUM DISTILLATE
CRYSTAL RESISTANT BROAD

SPECTRUM DISTILLATE
CBN DISTILLATE
FULL SPECTRUM WHOLE

HEMP EXTRACT
THC FREE WHOLE HEMP EXTRACT
WATER SOLUBLE LIQUIDS
WATER SOLUBLE POWDER
LEADING IN BULK & WHOLESALE

USA HEMP DERIVED CBD
Global Cannabinoids and their website GlobalCannabinoids.io is the largest bulk and wholesale B2B online
distribution platform for bulk and wholesale USA grown hemp derived cannabinoid products in the world.
GlobalCannabinoids.io has a database of over 60,000 customers and continues to experience massive growth.
Global Cannabinoids customers include the leading medical marijuana brands, nutraceutical companies,
veterinary industry, personal care, skin care companies, as well as Fortune 500 companies who are using CBD,
CBG, CBN, CBC, and other hemp derived cannabinoids in various product formulations and research and
development. Visit us online to register your B2B account and gain a true competitive
edge today!
globalcannabinoids.io
ABOUT NEW
FRONTIER DATA
New Frontier Data is an independent, Core Values

technology-driven analytics company specializing
in the global cannabis industry. It offers vetted • Honesty
data, actionable business intelligence and risk • Respect
management solutions for investors, operators, • Understanding
researchers and policymakers. New Frontier
Data’s reports and data have been cited in over Vision
80 countries around the world to inform industry
leaders. Founded in 2014, New Frontier Data is Be the Global Big Data & Intelligence Authority
headquartered in Washington, D.C. with addi- for the Cannabis Industry.
tional offices in Denver, CO, and London, UK.
Commitment to Our Clients
New Frontier Data does not take a position on the
merits of cannabis legalization. Rather, its mission The trusted one-stop shop for actionable
and mandate are to inform cannabis-related cannabis intelligence, New Frontier Data pro-
policy and business decisions through rigorous, vides individuals and organizations operating,
issue-neutral and comprehensive analysis of the researching, or investing in the cannabis industry
legal cannabis industry worldwide. with unparalleled access to actionable industry
intelligence and insight, helping them leverage
For more information about New Frontier Data, the power of big data to succeed in a fast-paced
please visit: NewFrontierData.com. and dynamic market.
We are committed to the highest standards and

Mission most rigorous protocols in data collection, analy-
sis, and reporting, protecting all PII and sources,
New Frontier Data’s mission is to elevate the as we continue to improve transparency into the
discussion around the legal cannabis industry global cannabis industry.
globally by providing unbiased, vetted infor-
mation for educating stakeholders to make
informed decisions.

A B O U T N E W F R O N T I E R D ATA
Report Contributors
P U B L I S H ER
Giadha Aguirre de Carcer, Founder &
Chief Executive Officer, New Frontier Data
H E A D Q UA R T E R S
ED I TO R 1400 I Street NW / Suite 350 / Washington, DC 20005
John Kagia, Chief Knowledge Officer, S A L E S & M A R KE T I N G
New Frontier Data 535 16th Street / Suite 620 / Denver, CO 80202
info@NewFrontierData.com 844-420-D8TA
L E A D AU T H O R
Kacey Morrissey, Director of Industry
Analytics, New Frontier Data
CO N T R I B U T I N G AU T H O R S
Beau R. Whitney, Vice President and
Senior Economist, New Frontier Data NewFrontierData.com
NewFrontierData.com
Rob Kuvinka, Manager of Data Science,
InterCannAlliance.com
New Frontier Data
Molly McCann, Senior Manager, HempBizJournal.com
HempBizJournal.com
Industry Analytics, New Frontier Data
NCIA’S INDUSTRY AWARDS
EXCELLENCE IN
TECHNOLOGY AWARD
FOR BUSINESS TOP TECH
EXCELLENCE IN
COMPANY
Q UA N T I TAT I V E A N A LY S I S
STRATEGY & INNOVATION
TECHNOLOGY AWARD
2 YEARS IN A ROW
STRATEGY & INNOVATION COMPANY
2 YEARS IN A ROW
Kacey Morrissey, Director of Industry

Analytics, New Frontier Data
CO P Y ED I TO R
J.J. McCoy, Senior Managing Editor,
New Frontier Data

EXECUTIVE
SUMMARY the sector’s performance, this report delivers
fresh insight into the latest realities and expansive
possibilities of legalized cannabis.
Market Growth Continues

to Exceed Expectations
The 2019 U.S. Cannabis Industry Outlook provides
New Frontier Data’s latest, perspective on the The legal cannabis market was worth an estimated
transformational growth of the legal cannabis $10.3 billion in 2018, and annual sales from
industry. Featuring the most complex sales currently-legal state markets are collectively
forecast we have built to date, analysis of the projected to grow at a compound annual growth
key trends shaping the industry’s evolution, and rate (CAGR) of 16%, to reach more than $29
new insights into the influence of market-specific billion by 2025.
regulations and evolving consumer behavior on
G R O W T H O F T H E U. S . L EG A L C A N N A B I S I N D U S T R Y
2017-2025
$29.7
2018-2025 Growth Rates (CAGR)
$27.2
Legal Medical Sales: 16.8% $25.5
Legal Adult-Use Sales: 15.8% $23.2
Total Legal Sales: 16.2% $20.2
$17.0
$13.6
$16.6
$14.8
$14.0
$10.3 $12.8
$11.1
$USD BILLIONS
$7.9 $9.3
$7.6
$3.3 $5.9
$4.6 $4.4 $6.0 $7.7 $9.1 $10.4 $11.5 $12.3 $13.1
2017 2018 2019 2020 2021 2022 2023 2024 2025
Legal Adult-Use Sales Legal Medical Use Sales
Note: Market size projections are based solely on the state markets that have passed medical and adult-use legalization initiatives as of July 2019
(and do not include assumptions for any additional states that may pass legalization measures before 2025)
Source: New Frontier Data

EXECUTIVE SUMMARY
N O T E : Projections are based solely on the state markets
that passed medical and adult use legalization initiatives as
In states where it is currently legal, annual sales of of August 2019, and do not include assumptions for any
medical cannabis are projected to grow at a 17% additional states which may pass legalization measures
CAGR through 2025, from $4.4 billion in 2018 before 2025. Projections do not include assumptions
to an estimated $13.1 billion by 2025. During the about potential changes to federal policy before 2025.
same period adult-use sales are projected to grow It remains possible that there will be sweeping changes to
at a 16% CAGR, from $5.9 billion to $16.6 billion. federal cannabis laws within the next decade, including the
rescheduling of cannabis from its current status as a Schedule
The industry expansion is fueled by convergent I substance – included in the ranks of the most dangerous
forces, including: the addition of new legal markets drugs – to Schedule II or III status, or potentially a complete
as more states reform their cannabis laws, sustained de-scheduling, which would bring cannabis regulations closer
growth in demand in legal states as consumers to those for alcohol. However, the unpredictability of the
make the transition from the unregulated market timing for the change to federal policy coupled with the
to the legal one, and greater diversification of uncertainty about the nature of the changes to the law
cannabis use for medical and wellness uses based prevent any accurate prediction of the extent to which the
on growing scientific affirmation of cannabis’ national market will grow following the changes.
expansive therapeutic value..
While competitive forces and economies of scale

should continue to drive down both wholesale L EG A L M A R K E T S H A R E B Y 2025
and retail prices, the continued growth in
2025 ESTIM ATED TOTAL LEGAL M ARKET: $29.7 BILLION
consumer demand will ensure sustained positive
growth through 2025. Furthermore, the strong Maryland
demand for concentrates and edibles will buoy 2%
New Jersey Rest of States
prices as these value-added products have held 3% 2% Combined
their premium pricing better than flower - which Ohio 11%

3% California
has been more vulnerable to pricing pressure as
Nevada 17%
supply increases. 3%
Oklahoma
B y 2 02 0 , w e p r o j e c t t h e l a r g e s t s t a t e 4%
Oregon 12%
markets for legal cannabis to be California, 4% Florida
Washington, Colorado, Florida, Michigan, Arizona
Oregon, and Massachusetts. 4%

Pennsylvania 9%
Washington
6%
Michigan 9%
Illinois
6% 7%
Massachusetts Colorado
Note: “Rest of states combined” includes annual revenue projections for 22

states. All share calculations are based on combined legal sales in existing
medical and adult use markets.

EXECUTIVE SUMMARY
Additional States Currently Growth in Illicit Market

Debating Cannabis Legalization Eroded by Legalization
Could Add Significantly to Total
Market Estimates by 2025 Despite the strong performance of the legal state
markets, nationally, the illicit market will serve the
Currently, 18 states are actively debating whether majority of this demand since most consumers still
to legalize cannabis for medical or adult use. The live in either medical-only markets or states with
list of potential new adult-use states includes no legalized cannabis. And despite cannabis’ broad
Rhode Island (which has the highest reported illegality, the total number of cannabis consumers
rate cannabis use among the 23 states where only in the U.S. is expected to grow by roughly 3% per
medical cannabis is legal), as well as New Jersey year over the next six years, reaching an estimated
and New York, two legal medical states that came 46.6 million consumers by the year 2025.
closest to legalizing adult-use cannabis in the last
year. If all 18 states in question were to legalize If a key objective of legalization is to disrupt illicit
programs, they could collectively add $11.4 billion markets, the states where cannabis is legal in
in annual sales revenue to the legal U.S. market by the U.S. are achieving that end. Even with the
their fourth year of operation. continued growth in the number of cannabis
P OT EN T I A L A D D I T I O N A L A N N UA L R E V EN U E S F R O M S TAT E S C U R R EN T LY
D EB AT I N G N E W C A N N A B I S L AW S
Potential Medical Revenue: $1.7 billion
Potential Adult-Use Revenue: $9.7 billion
Total Potential Revenue: $11.4 billion
Current Adult-Use Potential Adult-Use/Medical Use Current Medical Use Potential Medical Use

U. S . C A N N A B I S M A R K E T G R O W T H : L EG A L C A P T U R E V S . I L L I C I T
201 8-2025
$70
$64.3
2018 2019 2020 2021 2022 2023 2024 $57.3
2025
$60
$50
$40
MARKET SIZE, $USD BILLIONS
$29.7
$30
$27.2
$25.5
$23.2
$20.2
$20
$17.0
$13.6 $14.8 $16.6
$12.8 $14.0
$10.3 $11.1
$10 $9.3
$7.6
$5.9
$4.4 $6.0 $7.7 $9.1 $10.4 $11.5 $12.3 $13.1
$0
2018 2019 2020 2021 2022 2023 2024 2025
Legal Adult-Use Legal Medical Use Illicit Market

consumers nationally, the legal medical and adult be worth roughly $8.3 billion by 2020, rising to
use markets are projected to serve an increasing an estimated $9.4 billion by 2025.
proportion of that demand, resulting in an
estimated $7 billion decline in annual illicit sales Legal Market Expansion
between 2018 and 2025. Presents Growth Opportunities,
New Challenges
Among the states that have not passed medical
or adult use cannabis laws, Texas, North Carolina, Additional regulatory, social, economic, and
and Georgia currently represent the three largest investment trends discussed in the 2019 U.S.
unregulated state markets, worth a combined $7.8 Cannabis Report include:
billion in estimated annual illicit sales in 2018.
If they take no actions to legalize and regulate • The accelerating shift in public attitudes
and cementing support for fully legal
any form of cannabis use, the illicit markets in
cannabis among young adults
those three states collectively are projected to

L A R G E S T E S T I M AT ED I L L I C I T M A R K E T S B Y 2020
I N S TAT E S W I T H N O C A N N A B I S L E G A L I Z AT I O N
$4.2
SPENDING ($USD BILLIONS)
$2.2
ANNUAL ILLICIT MARKET
$1.9
$1.8
$1.6
$1.4
$1.3
Texas North Carolina Georgia Virginia Indiana Tennessee Wisconsin
• Groundbreaking insights into cannabis

consumers, including behavioral archetypes
• Which medical conditions are driving the
greatest increases in medical program
from New Frontier Data’s cannabis participation, even as consumers blur the
consumer intelligence, observations line between medical and wellness uses
on the nexus of cannabis and alcohol,
and discussion on the potential of • The impact of accelerating consolidation
and rise of multi-state operators
cannabis as an opioid substitution
on the market’s future growth
• Lessons from the first four full years
of legal cannabis in Colorado • The strong capital inflow into cannabis
as a catalyst for the growing scale of
• Analysis of the critical role of
licensing policy and consumer
merger and acquisition activity
retail access in program growth
• How different regulatory structures

have shaped the interplay of
medical and adult use programs in
the states where both are legal

METHODOLOGY Sampling was demographically representative of
the adult population in the United States, and
analyses were conducted on 3,138 cannabis con-
sumers – respondents who indicated that they
consumed cannabis in the past and will consume
it again – as well as 1,739 potential consumers who
Data Overview have never used cannabis but indicated that they
would consider using it in the future. The survey
The analysis in this report represents a new was conducted in October 2018.
threshold of modeling the evolving cannabis
industry. The forecasts presented herein lever- The survey data was subsequently used for
age data collected over five years spanning the segmentation analysis profiling nine major can-
breadth of the cannabis industry and insights nabis consumer archetypes. Forty-two categories
gained from dozens of state, national, and global comprising 151 unique data points were used to
forecasting iterations. define the consumer segments. The categories
include: product forms consumed, consump-
The data included in this report is drawn from a tion frequency, purchasing habits, reasons for
wide range of sources including: consumption, and cannabis policy views. The esti-
mated margin of error for the survey is 1.75%,
G OV E R N M E N T AG E N C I E S given a confidence interval of 95%.
We obtained data from federal, state, and munic- R E TA I L S A L E S

ipal agencies, on topics ranging from tax revenues
and medical cannabis patient participation rates, Point of sale data from strategic partnerships with
to the rates of illicit cannabis use, and general industry-leading point-of-sale platforms provides
demographic data. visibility into retail sales trends, including evolving
product demand, pricing and sales trends, and
CONSUMER SURVE YS variability across markets.
New Frontier Data 2018 Cannabis

Consumer Survey S U RV E Y AT A G L A N CE
New Frontier Data designed and conducted an SA MPLE SIZE M ARGIN OF ERROR
online survey in order to assess cannabis con- 3,138 ±1.75%

sumer attitudes, perceptions and use in the United
States. Survey themes included: cannabis use, M E T H O D O LO G Y
F I E L D I N G D AT E S
purchasing behavior and decision influencers,
10/19/2018 - 10/29/2018
Online
product preferences and expenditures, beliefs
Survey
about cannabis, and policy attitudes.

METHODOLOGY
Strainprint: Polypharmacy Survey Data were disqualified for not using another treatment
alongside cannabis. This in itself shows the prev-
A custom study was undertaken by Strainprint alence of polypharmacy among cannabis users.
using SurveyMonkey® to understand polyphar-
macy behavior and attitudes among Strainprint Data on the efficacy of medical cannabis treat-
app users, all of whom are medical cannabis ment was collected when a Patient entered the
patients. Data was collected from February 7, following into the Strainprint mobile app the
2019 to February 19, 2019. symptom they are treating, the product they are
using (correlated to chemovar), estimated dose,
The survey was administered online and took route of administration, and how they feel before
approximately 10-15 minutes, depending on how and after they medicate. “Efficacy” results were
many symptoms the user managed. Survey par- calculated as the differences between baseline and
ticipants were Strainprint mobile app users and post-medication scores based on a 1-to-10 Likert
were required to have consumed both medical scale. Strainprint collects the chemovar profile for
cannabis and another treatment type in the pre- all available products, including major and minor
ceding 18 months. cannabinoids and terpenes (where available). The
current medical regulations provide designated
These treatments include: prescription drugs Canadian medical patients with the right to use
like OxyContin, Percocet, and Prozac; over the cannabis for therapeutic purposes. All data based
counter medications (OTC), which include medi- on lab-tested and verified products that are avail-
cation that you can purchase at a drugstore without able under legal programs in Canada.
a prescription, such as Tylenol, Advil, or Gravol; or
natural remedies, meaning any herbal or naturo-
pathic/herbal remedies that can be purchased, for Efficacy results were calculated as follows:
example, at a health food store or from a naturo- Efficacy = (Calc 1 + Calc 2) / 2
path, such as St. John’s Wort, valerian, or melatonin Calc 1 = (x - y) / x
(not including any cannabis based products). Calc 2 = (x - y) / 10
Where X=severity prior to medicating
The final sample for this study included 1,016 par- and Y=severity post medicating
ticipants. The age of the respondents ranged from
18 to 74 years old, and the mean age was 38.7
years old. The gender of the respondents skewed Analyses primarily included descriptive statistics
female (61% female; 37% male; 2% other or not (mean and median scores), frequency counts, Chi
specified). On average, respondents reported square analyses to examine differences between
that they treated 11 symptoms with medical can- groups, and Spearman’s correlations. Statistical
nabis. Ninety percent (90%) of respondents were analyses were conducted in SPSS to identify dif-
located within Canada, while 10% were located ferences significant at the p=0.05 level.
in the United States. Only a small percentage
of those who were invited to participate (17%)

METHODOLOGY
A N C I L L A R Y C O M PA N I E S Market Projection Methodology
Non-plant touching businesses have been a criti- New Frontier Data has developed proprietary
cal source for insights into the evolving needs and models for estimating the size of both the legal
multi-sectoral impacts of the cannabis industry. and illicit cannabis markets in the U.S. The
Data ranging from capital flows to cultivation models are continually refined based on new
supply sales provide valuable indicators into the data inputs, expansion of legalization into new
leading edges of the market. Interviews with stra- markets, changes in state regulations, and other
tegically placed stakeholders, including leading market-disrupting events.
investors, business owners, regulators and law-
makers further hone our insights into emerging The market growth projections for legal sales
legal, regulatory, and industrial developments that included in this report reference both adult use
will impact the industry. and medical markets, and are focused exclu-
sively on retail sales to medical patients and
C A N N A B I S L AW adult use consumers. These projections do not
R E F O R M A DVO C AT E S
include wholesale transactions between produc-
The projections on the states most likely to legalize ers, processors, and retailers, nor do they include
in the next four years were based on extensive revenues from the ancillary (non-plant touching)
discussions with leading drug law reform advocates sectors of the industry.
who have been central in the national and state-
level campaigns to legalize cannabis. Their input The growth models were developed based on
was critical in informing our understanding of the analysis of key inputs including:
arc of the national legalization movement, as well
as the local political and legislative dynamics that • Size and growth of the total
population within each state
could influence the growth and performance of
each market. • Size and growth of the adult
population within each state
AC A D E M I C A N D
MEDICAL INSTITUTIONS • Usage trends of illicit cannabis
use in each state market
Research conducted by a broad range of academic
institutions, medical centers, think tanks, and uni- • Monthly changes in adult use sales
in legal adult use markets
versities provided rich insight into issues including
health effects of cannabis consumption, medical • Size and growth of the tourism
population in states with adult use
applications of the plant, and the socioeconomic
costs and outcomes of both cannabis prohibition sales, as well as in medical use states
that offer reciprocity to cardholding
and legalization.
medical patients from other states

METHODOLOGY
• Monthly changes in patient populations

for each medical market since the
Based on these inputs, we applied an economic
growth model to project the size of the current
activation of medical program legal and illicit state markets through 2025. The
projections are based on estimated sales per
• Number and types of qualifying medical
conditions accepted in the states which capita in both medical and adult use markets, and
track patient registration growth the model is iteratively refined as additional data
is collected on each market.
• Monthly changes in medical cannabis
sales in the states which track this data
• Monthly changes in medical cannabis

expenditures per patient in the
states which track this data
• Monthly changes in expenditures

per person in adult use states
which track this data
• Interplay between medical and adult use

sales in states where adult use sales are legal
• Analysis of each state’s regulatory

model to identify similarities and
differences in each market’s structure
• Time between passage of each

state’s legalization measure and
launch of sales in the state

NATIONAL
OVERVIEW well as the legalization of cannabis for personal
adult use in Vermont, and the legalization of
medical cannabis in Missouri. In the first half of
2019, Maine, Ohio, Arkansas, and North Dakota
all began sales of medical cannabis, and Illinois
became the 11th state to legalize cannabis for
Currently, 33 states plus the District adult use.
of Columbia (D.C.) have legalized cannabis for
medical use, and 11 states plus D.C. have legalized National Reach of Medical
cannabis for personal or adult-use. This brings the Cannabis Programs
total population of people living in a state that
has legalized some form of medical or adult-use With 33 legal medical state markets (plus D.C.),
cannabis to 223 million, or 68% of the 2019 total the total number of patients across the country
U.S. population. treating ailments with legal medical cannabis
has surpassed 2.3 million, and that number is
2018 saw the start of legal sales in multiple new projected to continue to climb as newly legal
state medical and adult-use markets – including state medical programs become fully operational.
Pennsylvania, California, and Massachusetts, as
L EG A L I Z ED S TAT E S
223
million
Number of people
living in a state with
some form of
legalized cannabis
Medical & Adult-Use Medical Use Only No Legal High-THC Market

L EG A L I Z AT I O N T I M EL I N E
1998: OR, 2007: 2010: 2014: 2017:

AK & WA NM NJ & MN, NY WV
2004: AZ & MD
VT & MT 2015: LA
2012: CT 2018:
2008: & MA MO, UT,
1999: ME MI OK
2016: PA,
2009: 2013: OH, AR,
1996: CA 2000: HI, 2006: DC 2011: NH &
NV, & CO DE FL & ND
RI IL
19 9 6 1998 2000 2002 2004 2 006 2 008 2 010 2 012 2 014 2 016 2 0 18 2 0 19
2018: 2019:
2014: 2015: VT IL
AK & DC
OR
2012: CO 2016: CA, NV,

& WA ME & MA
Adult-Use Medical Use
U. S . M ED I C A L C A N N A B I S PAT I EN T S
C U R R E N T PAT I E N T S AT U R AT I O N *
2.3
5%
million
Current number of
medical cannabis
patients in the U.S.
1.3%
Average saturation
rate across all legal
medical satates**
0%
*Patient saturation reflects the number of estimated registered medical cannabis patients in each state as a percentage of state population.
**The national average saturation reflects the average patient saturation rate across all legal medical cannabis markets that have begun
the patient registration process.

TOP 7 STATES BY PATIENT SATURATION TO P 7 S TAT E S B Y PAT I EN T CO U N T
A S O F A U G U S T 201 9 A S O F A U G U S T 201 9
State Patient Saturation State Patient Count
Oklahoma 4.4% California1 405,867
New Mexico 3.5% Michigan 315,913
Michigan 3.2% Florida 270,137
Montana 3.1% Arizona 202,861
Arizona 2.8% Oklahoma 175,700
Maine 2.7% Pennsylvania 133,850
Rhode Island 2.0% New York 110,753
1. Patient count displayed for the state of California is New Frontier Data's estimate for active medical patients only. There are an estimated 2 million
card-holding medical cannabis patients in California (4.9% saturation), of which only an estimated 1/5th are active purchasers of medical cannabis
products from licensed and regulated medical dispensaries.
Estimated Total U.S. Cannabis States with the Most

Consumer Population Cannabis Consumers
While legal state medical cannabis programs are The number of cannabis consumers in a given
providing medical cannabis access to a combined state depends on both the state’s total population,
2.3 million patients nationwide, strictly defined percentage of population above 18 years of age,
qualifying condition lists limit participation to a and reported cannabis usage rates compiled by
small pool of residents in some medical markets. the government. California, Florida, and New York
And with just 28% of the U.S. population resid- have the three largest populations of cannabis
ing in a state that has legalized adult-use, the consumers in the country, due largely to their
majority of Americans still do not have access large populations.
to legal cannabis.
When accounting for state population, the states
Despite nearly a century of cannabis prohibition in with the highest density of cannabis consumers
varying forms in the U.S., a significant and growing are D.C., Oregon, Vermont, and Colorado, all
number of people choose to access and consume states with legal adult use cannabis markets and
cannabis from the illicit market. strong public acceptance of its use.
An estimated 38.4 million U.S. adults consume

cannabis at least once annually, from either a legal
or illicit source.

S TAT E S W I T H T H E M O S T C A N N A B I S CO N S U M ER S *
201 8 , C O N S U M E R S I N M I L L I O N S
California 5.9
Florida 2.5
New York 2.4
Texas 2.3
Illinois 1.4
Pennsylvania 1.4
Washington 1.4
Michigan 1.4
Ohio 1.3
Massachusetts 1.2
MILLIONS
*"Cannabis Consumer" is defined as an adult 18+ who has consumed cannabis at least once in the past year
S TAT E S W I T H H I G H E S T C A N N A B I S CO N S U M ER D EN S I T Y
E S T I M AT E D C A N N A B I S C O N S U M E R S * P E R 1 ,0 0 0 P E O P L E
D.C. 227
Oregon 223
Vermont 215
Colorado 212
Maine 204
Washington 186
Massachusetts 182
Alaska 179
Rhode Island 172
California 161
CONSUMERS
*"Cannabis Consumer" is defined as an adult 18+ who has consumed cannabis at least once in the past year

U.S. MARKET
DEMAND annual growth rate (CAGR) of 14% over the next
six years, to reach nearly $30 billion by 2025.
Annual sales of medical cannabis are projected

to grow at a 17% CAGR through 2025, from
$4.4 billion in 2018 to an estimated $13.1 billion
New Frontier Data US Cannabis by 2025. During the same period adult-use sales
Industry Revenue Forecasts are projected to grow at a 16% CAGR, from $5.9
billion to $16.6 billion.
In 2018 the U.S. legal cannabis industry generated
an estimated $10.3 billion in consumer sales, with The industry expansion is fueled by three con-
annual sales projected to reach $13.6 billion by the vergent forces – from the addition of new legal
close of 2019. Total legal sales of cannabis in current markets as more states activate their programs,
legal states are projected to grow at a compound from sustained growth in demand in legal states
G R O W T H O F T H E U. S . L EG A L C A N N A B I S I N D U S T R Y
2017-2025
$29.7
2018-2025 Growth Rates (CAGR)
$27.2
Legal Medical Sales: 16.8% $25.5
Legal Adult-Use Sales: 15.8% $23.2
Total Legal Sales: 16.2% $20.2
$17.0
$13.6
$16.6
$14.8
$14.0
$10.3 $12.8
$11.1
$USD BILLIONS
$7.9 $9.3
$7.6
$3.3 $5.9
$4.6 $4.4 $6.0 $7.7 $9.1 $10.4 $11.5 $12.3 $13.1
2017 2018 2019 2020 2021 2022 2023 2024 2025
Legal Adult-Use Sales Legal Medical Use Sales
Note: Market size projections are based solely on the state markets that have passed medical and adult-use legalization initiatives as of July 2019
(and do not include assumptions for any additional states that may pass legalization measures before 2025)

U.S . M A R K E T D E M A N D
L EG A L M A R K E T S H A R E B Y 2025
as consumers make the transition from the illicit 2025 ESTIM ATED TOTAL LEGAL M ARKET: $29.7 BILLION
market to the legal market, and from advance-
Maryland
ments in research affirming the diverse medical 2%
and wellness applications for cannabis. While New Jersey Rest of States
Combined
3% 2%
competitive forces and economies of scale will Ohio 11%
3% California
continue to drive down both wholesale and retail
Nevada 17%
prices, increasing consumer demand will propel 3%
sustained positive growth in total legal revenues Oklahoma
4%
through 2025. Oregon 12%
4% Florida
Arizona
By 2020, the largest state markets for legal 4%
9%
cannabis are projected to be California, Wash- Pennsylvania
Washington
6%
ington, Colorado, Florida, Michigan, Oregon, Michigan 9%
Illinois
and Massachusetts. 6% 7%
Massachusetts Colorado
Note: “Rest of states combined” includes annual revenue projections for 22

states. All share calculations are based on combined legal sales in existing
medical and adult use markets.
L A R G E S T L EG A L C A N N A B I S S TAT E S I N 2020
2020 P R O J E C T E D L E G A L C A N N A B I S S A L E S ($ I N M I L L I O N S )
California $3,161
Washington $2,603
Colorado $1,821
Florida $1,126
Michigan $1,005
Oregon $910
Massachusetts $848
Arizona $825
Nevada
Oklahoma $569
$766
$7.6 billion
Pennsylvania $558 Top 3 States (CA, WA,CO)
Illinois $542 projected to generate a
Maryland $415 combined $7.6 billion in
New Jersey $246 annual sales by 2020.
Maine $233
$ MILLIONS
Note: Values shown are for TOTAL legal market, medical and adult-use (when applicable) sales combined.

Four Years of Legal CO LO R A D O BY T H E N UM B ER S

Cannabis in Colorado:
20 1 9 YE AR MEDIC AL Y E A R A D U LT-U S E
KE Y TRENDS FROM A MERIC A’ S FIRS T P O P U L AT I O N USE LEG ALIZED LEG ALIZED
LEG AL ADULT-USE C ANNABIS M ARKE T 5,784,894 2000 2012
As a new wave of states from Illinois to Missouri
face their advent of newly legal cannabis, New TOTA L N U M B E R O F PA S T PA S T
C A NN A B IS CONSUMERS YEAR MONTH
Frontier Data’s analysis of Colorado’s first years of past year users, 2019 U S A G E R AT E U S A G E R AT E
legal cannabis offers insights about the country’s 1.2 million 27% 20%
most established adult-use market, as a guide for
expectations as more states adopt policy reforms. REGIS TERED PAT I E N T LEG AL M ARKE T
MEDIC AL S AT U R AT I O N GROW TH
PAT I E N T S R AT E FOREC A S T
as of July 2019 as of July 2019 CAGR 2018-2025
When given a (good) choice, consumers will
go legal. With over $6 billion in sales throughout 83,106 1.4% 3.7%
its market’s first five years (2014-2018), con-
CO LO R A D O L EG A L C A N N A B I S S A L E S P R O J EC T I O N S
201 9-2025 ($ I N B I L L I O N S )
$2.0 $2.0 $2.0

$1.9 $1.9
$1.8
$1.7
$USD BILLIONS
$1.4 $1.5 $1.6 $1.6 $1.7

$1.7
$1.8
$0.3 $0.3 $0.3 $0.3 $0.3 $0.2 $0.2
2019 2020 2021 2022 2023 2024 2025
Legal Adult-Use Legal Medical Use

$905,508,416
CO LO R A D O TOTA L C A N N A B I S TA X E S , L I C E N S E & F E E R E V E N U E
( 20 1 4-20 1 8)
R E TA I L S A L E S R E V EN U E CH A N G E I N CO LO R A D O
C A N N A B I S S A L E S S I N CE 2014
$6,042,561,798
total revenue
$1,214
$1,091
$862
300%
A D U LT-U S E
$USD MILLIONS
$578
$438 $423
$388 $408 MEDIC AL
$338
$303
-13%
2014 2015 2016 2017 2018
Adult-Use Medical Use
PA S T-MO N T H C A N N A B I S U S E PA S T-Y E A R C A N N A B I S U S E
R E TA I L
ESTABLISHMENT
LICENSE 89% 18.8% 81% 26.5% 65%
GROW TH
C A N N A B I S B U S I N E S S L I CEN S E S
436,155
L B S . O F R E TA I L F L O W E R
SO L D IN 2018
12,769,868 883 1,123

1,350 1,520
1,577
EDIBLE UNITS SOLD
IN 2018
33,967
1,416 1,469 1,584 1,531 1,396
LBS. OF
C O N C E N T R AT E S O L D 2014 2015 2016 2017 2018
Medical Business Licenses Retail Establishment Licenses
© ©
N ENWE W
F RFORN
OTNI ET IRE R
D ADTAAT, AA, LAL L RL I R
G IHGTHS T R
S ERSEESREVREVDE D| N
| ENWE FWRFORN
OTNI ET IREDRADTAAT. C
A .OCM
O M| 23
| 23
sumers have flocked to Colorado, attracted by rado’s adult-use sales had already climbed 40%
competitive prices, expansive options of regulated higher than sales in its long-established medical
products, and widespread access in major popula- market. The dramatic difference in the respective
tion centers. Indeed, New Frontier Data estimates growth rates between the medical and adult-use
that over 80% of all cannabis demand in the state markets underscores the value of medical licenses
is now being served by the legal market. As such, in those states still debating or formulating adult-
further growth from consumers transitioning from use legalization. As seen in Colorado, the medical
the remaining unregulated/illicit market to the license holders who were operational when the
state-regulated industry will be incremental in the state fully legalized were well positioned to lead the
coming years. Its success in getting consumers to adult-use market, with many having since lever-
embrace its legal market is a hallmark achievement aged themselves to become the largest operators
of Colorado’s efforts to disrupt the illicit market in the market.
and affirms that consumers will opt for legitimacy
when products are price-competitive and com- Legalization reflects a sweeping cultural
paratively convenient. change. The significant increase in self-reported
cannabis use also tells of a sweeping cultural
The industry’s growth is in the adult-use change underway in Colorado, where 1/5 of
market. Also notable about the numbers is adults (19%) reported consuming in the past
how quickly adult-use sales eclipsed the medical month (up 81% since 2012), while ¼ (26%) report
market. By the end of their second year, Colo- consuming in the past year (a 65% increase
CO LO R A D O TOTA L A D D R E S S A B L E M A R K E T
766,629
721,838 738,424
712,166
628,082
517,947
468,660
108,656 111,030 113,453 107,798 93,095

85,124 86,840
2012 2013 2014 2015 2016 2017 2018
Total Cannabis Consumers (past month) Medical Cannabis Patients

since 2012). Several convergent factors drive long-standing stigma, and its increasing social
the increases: Not only is Colorado among the and cultural presence (often as an analog to
demographically youngest states in the country, alcohol), have translated to a large (and growing)
but it also has seen the third-highest influx of number of adults being exposed to cannabis and
millennials (who consume cannabis at higher opting more often to consume it. Likewise, with
rates than do older adults). more confirmed science detailing the plant’s
therapeutic uses, more consumers are integrat-
Beyond the demographic shift, the end of prohi- ing it into their lifestyle routines and wellness
bition in Colorado empowered consumers to be habits, resulting in higher reported rates of use
more public and open about their cannabis use. and a consumer market now including more than
The normalization of cannabis, the erosion of its 760,000 adults statewide.
P O U N D S O F F LO W ER S O L D I N CO LO R A D O
J A N 201 4 - D E C 201 8
DEC 2018
30,000 2014-2018 TOTAL
25,775
25,000 1.6
million
20,000 pounds
JUN 2016
14,242 EQUIVALENT TO:

15,000
10,000
DEC 2018 2.2
11,869 billion
1/3 gram joints
50,00
–OR–
0
1,795
JAN
MAR
MAY
JUL
SEP
NOV
JAN
MAR
MAY
JUL
SEP
NOV
JAN
MAR
MAY
JUL
SEP
NOV
JAN
MAR
MAY
JUL
SEP
NOV
JAN
MAR
MAY
JUL
SEP
NOV
2014 2015 2016 2017 2018
Medical 109,578 144,537 159,998 172,994 147,863 joints per adult-use

consumer in
Adult Colorado
38,660 106,932 175,642 238,149 288,292
Use
TOTAL 148,238 251,469 335,640 411,143 436,155
Source: Marijuana Enforcement Division Colorado

Flower still dominates, but alternative prod-

ucts are the future. Colorado has been a guiding
market to understanding the evolving product 38,790
landscape. Throughout its market’s first five years, C A N N A B I S J O B S C R E AT E D
D I R E C T LY & I N D I R E C T LY
retailers sold over 400,000 lbs. of flower, nearly
13 million edible units, and 34,000 lbs. of con-
centrates. While flower sales dominated at the
market’s outset, there has been a dramatic shift 300%
C H A N G E I N A D U LT-U S E
from flower and combustion-based products to CANNABIS JOBS IN
CO LO R A D O
concentrates and other delivery mechanisms. The ( D E C 2 0 1 4-D E C 2 0 1 8)
shift to vapes, popularized in Colorado, reshaped
cannabis consumption trends nationally. Indeed,
New Frontier Data’s cannabis consumer research
has shown that sales’ shifting from flower is hap-
3,388,000
C A N N A-TO U R I S T S :
pening in all markets, though at a slightly slower TO U R I S T S W H O H AV E
PA R T I C I PAT E D I N T H E
pace in unregulated and immature markets. That S TAT E ' S L E G A L C A N N A B I S
INDUSTRY
development is important for adult-use retailers
in newly legal markets, who will encounter con-
sumers far more familiar with vapes and other
non-combustible products than consumers were the Centennial State remains a highly influential
in Colorado were at the launch of its market. market in the culture and commerce of cannabis.
Cannabis has been an economic engine for Public safety incidents have risen slightly
the state. Colorado has seen 3,000 licensed amidst a steep decline in prohibition enforce-
cannabis businesses create nearly 39,000 jobs ment. Despite dramatic increases in the number
and raise over $1 billion in tax revenues. And while of adults reporting regular cannabis use, any
most demand has been generated by state resi- corresponding number of cannabis-related sum-
dents, tourists have also participated significantly: monses for driving under the influence of drugs
New Frontier Data’s latest analysis shows that an (DUID) have increased only by 5%, suggesting
estimated 3.4 million visitors have participated in that the state’s public education campaigns and
Colorado’s market since legalization. Beyond its enforcement efforts have been effective in dis-
stimulative effect on local economies, Colorado’s suading drivers from getting behind the wheel
canna-tourism has helped shape debates in other after consuming cannabis. In fact, since 2012,
states and countries, as visitors return to their own the number of cannabis-related arrests has fallen
markets with new perspectives on legal cannabis. by half, reflecting the prioritization of cannabis
While Colorado’s head start as a canna-tour- education/awareness efforts since legalization.
ism destination will be eclipsed by other markets
(including California and Nevada), the long-antic- While no state has achieved perfection in actual-
ipated start of social use spaces will ensure that izing its legal cannabis programs, Colorado’s early

A R R E S T S FO R A L L D U I S UM MO N S E S I S S U ED BY
C A N N A B I S O FFEN S E S CO LO R A D O S TAT E P O L I CE
12,798
5%
INCRE A SE IN 153
C A N N A B I S- 112
R E L AT E D D U I 107 168
SUMMONS
239
6,532 6,535 213
6,244 6,203 210 216
5,989
3%
O F TOTA L
CANNABIS 359 335 388 335
SEIZURES FOR
20 1 6 W E R E I N 2014 2015 2016 2017
2012 2013 2014 2015 2016 2017 CO LO R A D O
Cannabis Only Cannabis & Alcohol
Cannabis & Other Drugs
experiences demonstrate the explosive growth A Look at Potential Revenue

potential for a well-run regulated market. With from Future Legalization States
more realized and sustained growth potential
fueled by product innovations, expanding thera- In the past, certain factors such as high regional
peutic and wellness uses, and the burgeoning new cannabis usage rates and strong public support for
nationwide hemp market, the market’s evolution legalization have proven reliable indicators of the
presents expansive new opportunities for growth, potential for future state legalization, and based on
and key insights to the future of legal cannabis. the trends in those state indicators, the patterns
in state legalization of cannabis do not appear to
be losing momentum.
Currently, 18 states are actively debating whether

to legalize cannabis for medical or adult use. The list
of potential new adult-use states includes Rhode
Island, the state with the highest reported rate
of monthly cannabis usage across all legal med-
ical-only states, as well as New Jersey and New
York, two legal medical states that came very close
to legalizing adult-use cannabis in the last year.

A N N UA L R E V EN U E E S T I M AT E S F O R S TAT E S W I T H P OT EN T I A L
TO PA S S L EG A L I Z AT I O N M E A S U R E S B EF O R E 2025
MEDICAL A D U LT- U S E
Potential Annual Cannabis Sales Potential Annual Cannabis Sales

State State
by 4th year of Market Operation by 4th year of Market Operation
Texas $713.4 mm Florida $2.54 B
Georgia $250.8 mm New York $2.36 B
North Carolina $247.4 mm Ohio $1.24 B
Virginia $198.5 mm New Jersey $881.7 mm
Tennessee $158.9 mm Maryland $839.7 mm
South Carolina $123.0 mm Arizona $625.8 mm
South Dakota $20.7 mm Connecticut $460.9 mm
New Mexico $232.2 mm
New Hampshire $224.9 mm
Rhode Island $168.0 mm
Montana $151.6 mm
P OT EN T I A L A D D I T I O N A L A N N UA L R E V EN U E S F R O M S TAT E S C U R R EN T LY
D EB AT I N G N E W C A N N A B I S L AW S
Potential Medical Revenue: $1.7 billion
Potential Adult-Use Revenue: $9.7 billion
Total Potential Revenue: $11.4 billion
Current Adult-Use Potential Adult-Use/Medical Use Current Medical Use Potential Medical Use

If all 18 states in question were to legalize pro- Legalization in these markets will not only generate
grams, they could add a combined $11.4 billion in significant new revenues, but it will also funda-
annual sales revenue to the legal U.S. market by mentally reshape the status of cannabis in the
their fourth year of operation. U.S., as the majority of Americans would then be
living in fully legal, regulated markets.
Medical programs are being considered in 7 states
(GA, NC, SC, SD, TN, TX, and VA), which together The Growing Consumer Market
by Year 4 would generate an estimated $1.7 billion
in annual sales revenue, while adult-use programs
CANNABIS USE IS RISING
are being substantively debated in 11 states (AZ,
CT, FL, MD, MT, NH, NJ, NM, NY, OH, and RI), Roughly 10% of American adults aged 18+ report
which together by Year 4 would add an estimated using cannabis in the past month, and 15% report
$9.7 billion to the total U.S. legal market. having used cannabis in the last year. The number
of adults who use cannabis regularly has grown by
S TAT E S W I T H T H E L A R G E S T I N C R E A S E S I N R EP O R T ED
M O N T H LY C A N N A B I S U S E B Y A D U LT S 18+ ( 2010-2017 )
20%
19%
18%
16% 16%
12% 12% 12%

11%
10%
9% 9% 9%
8%
7% 7%
6% 6%
5%
3%
$0
D.C. Kentucky Maine Maryland Nevada New Mexico Oregon Utah Vermont Washington
2010 Reported Monthly Usage 2017 Reported Monthly Usage
Source: SAMHSA, Center for Behavioral Health Statistics and Quality, National Survey on Drug Use and Health, 18+ population, Released Dec 2018

C A N N A B I S U S AG E R AT E S B Y L EG A L M A R K E T T Y P E
PA S T-M O N T H U S A G E , A D U LT S 1 8 +, 2017
U.S. 9.51%
Oregon
Vermont
D.C.
Colorado
Alaska
Maine
Washington
Massachusetts
Nevada
Michigan
California
Illinois
Rhode Island 2017 National
Montana Past Month
New Hampshire
New Mexico Cannabis Users
Maryland
Connecticut
Delaware
New York
Ohio
Florida
Missouri 9.5%
Arizona
Pennsylvania
average
Arkansas
Hawaii
Minnesota
Louisiana
West Virginia
New Jersey
Oklahoma Up
North Dakota
Utah
Indiana
Tennessee
+50%
since 2009
North Carolina
Wisconsin
Kentucky
Wyoming
Mississippi
24
Virginia
Georgia
Iowa
South Carolina
Alabama million
Texas
Nebraska adults 18+
Idaho
South Dakota
Kansas
0% 5% 10% 15% 20%
Legal Adult-Use Market Legal Medical Market Only CBD-Only No Legal Market
7.8 million since 2010, topping 24 million in 2017, The states with the highest reported rates of
reflecting rapidly evolving public attitudes toward monthly use are all states with some form of can-
cannabis, as the stigma has eroded, the majority nabis legalization in effect (i.e., an active medical
of states have advanced cannabis reform, and market, an adult-use market, or both).
science has validated the plant’s diverse thera-
peutic and industrial properties.

S TAT E S W I T H T H E LO W E S T R EP O R T ED M O N T H LY C A N N A B I S U S E B Y A D U LT S 18+
2017
$50
Virginia 7.1%
Oklahoma 7.1%
$40
Georgia 6.9%
Iowa 6.8%
$30
Kansas 6.8%
South Carolina 6.8%

$20
North Dakota 6.6%
Alabama 6.5%
Utah 6.5% $10
Texas 6.1%
5.6% 5.8% 6.0% 6.2% 6.4% 6.6% 6.8% 7.0% 7.2%
Factors leading to increased reported cannabis usage: Higher Likelihood to Report Use
Those same shifting social norms are creating an
Rising Social Acceptance of Cannabis Use environment in which users of cannabis are more
The normalization of cannabis is leading to likely to admit use, reducing the underreporting
increased use as the drug loses its stigma and errors in previous years.
the number of “cannabis-appropriate” situations
– social settings where cannabis use is accept- While cannabis usage rates are trending upward
able – grows. The trend is driven not by new across the U.S., there is a significant difference
consumers starting to use cannabis for the first in reported usage rates between states where it is
time, but rather by formerly infrequent consum- legal and those where it is not. These differences
ers becoming more comfortable and frequent are driven by both by social and political differ-
users as barriers to access are lifted, costs fall, and ences, as well as differences in under-reporting
new product forms facilitate use among consum- born from the differing legal status of cannabis
ers who prefer not to smoke. Additionally, social across the individual states.
settings where cannabis use is appropriate are
become more commonplace; such is a trend that The most politically conservative states have
will accelerate as states increasingly license venues been slowest to advance any type of cannabis law,
where cannabis can be used socially. including for CBD, whereas the country’s most

I D EO LO G Y B Y S TAT E , 2016
WA NH ME
MT ND VT
MN MA
OR WI NY
ID SD
MI RI
WY CT
IA PN NH
NE OH DE
NV IL IN
UT WV MD
CO VA
KS MO KY
CA
NC
TN
OK AR SC
AZ NM
MS AL GA
AK
TX LA
HI FL
Most Above-Average More Liberal Than Below-Average Average

Conservative Conservative Conservative Conservative
Source: Gallup Daily
M O S T & L E A S T CO N S ER VAT I V E S TAT E S

% C O N S E R VAT I V E M I N U S % L I B E R A L
Conservative Conservative
Most Conservative States Least Conservative States
Advantage Advantage
Wyoming +35 Vermont -14
North Dakota +31 Massachusetts -8
Mississippi +31 Connecticut -4
Oklahoma +30 New York -2
Alabama +30 Washington 0
Arkansas +28 Maine 0
Idaho +28 California +1
Louisiana +27 Oregon +1
Montana +26 Maryland +1
Utah +26 Hawaii +2
Tennessee +26
Source: Gallup Poll, Gallup Daily

liberal states have been the vanguard of medical of states prepare to legalize, usage rates alone
and adult use legalization. have become a less reliable predictor of which
market will legalize next. Local political and social
In Utah, for example, the Mormon Church — dynamics are now greater determinants of leg-
which is highly influential in state politics — came islative reform, as was seen in the recent failed
out strongly against the proposed medical canna- legalization efforts in New York and New Jersey,
bis law despite widespread support among voters. and successful measure in Illinois.
(Ultimately, the church reversed its position and
supporting the bill following intense advocacy by With cannabis use rising at different rates in
its congregants.) markets domestically and internationally, it is
critical that policymakers, investors and business
Cannabis use has been highly correlated to legal- owners understand and prepare for each market’s
ization, with the states with the highest usage rates unique dynamics, including the factors influenc-
being most likely to legalize, while the lowest-use ing acceptance and use in increasingly culturally
states have either passed highly restrictive mea- diverse legal markets.
sures or no laws at all. However, as the next wave
TOTA L U. S . E S T I M AT ED C A N N A B I S CO N S U M ER P O P U L AT I O N
45.7 46.6
43.9 44.8
42.9
41.9
40.3
POPUL ATION IN MILLIONS
2019 2020 2021 2022 2023 2024 2025
Note: “Cannabis Consumer” is defined as a person 18+ who has consumed cannabis at least once in the preceding year.

U. S . C A N N A B I S M A R K E T G R O W T H : L EG A L C A P T U R E V S . I L L I C I T
201 8-2025
$70
$64.3
2018 2019 2020 2021 2022 2023 2024 $57.3
2025
$60
$50
$40
MARKET SIZE, $USD BILLIONS
$29.7
$30
$27.2
$25.5
$23.2
$20.2
$20
$17.0
$13.6 $14.8 $16.6
$12.8 $14.0
$10.3 $11.1
$10 $9.3
$7.6
$5.9
$4.4 $6.0 $7.7 $9.1 $10.4 $11.5 $12.3 $13.1
$0
2018 2019 2020 2021 2022 2023 2024 2025
Legal Adult-Use Legal Medical Use Illicit Market

I L L I C I T M A R K E T E S T I M AT E S years, reaching an estimated 46.6 million con-

sumers by the year 2025.
Population growth and rising usage rates will lead
over time to a natural increase in the size of the States that choose to legalize the possession, use,
total addressable market for cannabis, however, and sale of cannabis products will begin to capture
the illicit market will serve the majority of this a portion of illicit demand. Key factors influencing
demand since most consumers in the U.S. live in how much demand a legal market can capture -
either a medical-only market or a state with no and how quickly - include:
legalized cannabis.
• Flexibility of regulatory structure to
adapt to changing market dynamics;
While the size and growth of cannabis consumer
populations differ by state, the total number of • Market implementation timeline;
cannabis consumers in the U.S. is expected to • Allowances for diverse product types;
grow by roughly 3% per year over the next six • Taxes and Retail Prices;

L A R G E S T E S T I M AT ED I L L I C I T M A R K E T S B Y 2020
I N S TAT E S W I T H N O C A N N A B I S L E G A L I Z AT I O N
$4.2
SPENDING ($USD BILLIONS)
$2.2
ANNUAL ILLICIT MARKET
$1.9
$1.8
$1.6
$1.4
$1.3
Texas North Carolina Georgia Virginia Indiana Tennessee Wisconsin
• Product access (largely determined by

number of licenses issued by the state
While the total collective national illicit market
for cannabis is projected to shrink in the wake of
for cultivars and dispensaries, as well numerous state reform movements, when indi-
as allowances for delivery services) vidual state legal markets falter (as was seen in
• Barriers to patient participation
(largely determined by qualifying
California’s initial rollout of adult-use and change
in medical market regulations), the illicit market is
conditions in medical states).
able to recapture those consumers.
The 33 existing legal medical states and 11 existing Among the states that have no medical or adult-
legal adult-use states collectively are projected use cannabis sales in place, Texas, North Carolina,
to convert a growing portion of the national illicit and Georgia currently represent the three largest
market into legal sales through 2025. Between illicit state markets, worth a combined $7.8 billion
2018 and 2025, the U.S. illicit market will be by in estimated illicit cannabis sales in 2018. With no
reduced by nearly $7 billion. action to legalize cannabis, the combined illicit
market in those three states is projected to be
worth roughly $8.3 billion by 2020, rising to an
estimated $9.4 billion by 2025.

G L O B A L S P R E A D O F L E G A L I Z AT I O N
A S A C ATA LY S T F O R G R O W T H
Countries around the world are beginning to turn to of opportunities will depend heavily on the regulations, level
cannabis legalization to harness the plant’s therapeutic value, of government involvement, political climate, and market
spur economic activity, and reduce crime. While few coun- demand in each country. All those pursuing an opportunity
tries have advanced as far in their debates as the United in an emerging market should be sure to have a clear under-
States, Uruguay, and Canada, calls for expanding medical standing of the cultural, political, economic, and regulatory
cannabis access are reverberating across the globe. Organi- nuances specific to the market (and must ensure proper due
zations such as World Health Organization (WHO) signing diligence is done through the analysis of any available data),
on with their support has been instrumental in changing the before entering a new foreign cannabis market.
global perspective.
While more than 50 countries worldwide have legalized
As popular support for legal cannabis grows and leads to some form of cannabis for medical use, and six — Canada,
adoption of new cannabis laws, cannabis investors soon will Georgia, Guam, South Africa, the Northern Mariana Islands,
have varied opportunities across several countries. The types and Uruguay — have legalized cannabis for personal or rec-
C A N N A B I S & H E M P : G LO B A L P H EN O M EN A
Legal Medical and/or Adult Use Cannabis

G LO B A L C A N N A B I S L EG A L I T Y B Y CO U N T R Y
Africa Asia Caribbean Europe Latin North Oceania

America America
Algeria Afghanistan Antigua and Barbuda Albania ! Argentina " ! Canada American Samoa
Angola Bahrain Aruba Andorra Belize Greenland ! Australia
Benin Bangladesh Bahamas, The Armenia Bolivia United States Fiji
Botswana Bhutan Barbados ! Austria ! Brazil French Polynesia
Burkina Faso Brunei Darussalam ! Bermuda Azerbaijan ! Chile " ! Guam
Burundi Cambodia British Virgin Islands Belarus ! Colombia Kiribati
Cabo Verde China ! Cayman Islands ! Belgium Costa Rica Marshall Islands
Cameroon Hong Kong SAR, China Cuba Bosnia and Ecuador ! Micronesia/
Herzegovina FSM
Central African Republic India ! Curacao Bulgaria El Salvador Nauru
Chad Indonesia Dominica ! Channel Islands Guatemala New Caledonia
Comoros Iran, Islamic Rep. Dominican Republic ! Croatia Guyana ! New Zealand
Congo, Dem. Rep. Iraq Grenada ! Cyprus Honduras " ! Northern
Mariana Islands
Congo, Rep. ! Israel Haiti ! Czech Republic ! Mexico Palau
Cote d'Ivoire Japan ! Jamaica ! Denmark Nicaragua Papua New Guinea
Djibouti Jordan ! Puerto Rico Estonia Panama Samoa
Egypt, Arab Rep. Korea, Dem. People's Rep. Sint Maarten (Dutch) ! Faroe Islands ! Paraguay Solomon Islands
Equatorial Guinea Korea, Rep. St. Kitts and Nevis ! Finland ! Peru Tonga
Eritrea Kuwait St. Lucia ! France Suriname Tuvalu
Eswatini Kyrgyz Republic St. Martin (French) " ! Georgia " ! Uruguay ! Vanuatu
Ethiopia Lao PDR St. Vincent ! Germany Venezuela, RB
and the Grenadines
Gabon Lebanon Trinidad and Tobago ! Gibraltar
The Gambia Macao SAR, China Turks and ! Greece
Caicos Islands
Ghana Malaysia ! Virgin Islands (U.S.) Hungary
Guinea Maldives Iceland
Guinea-Bissau Mongolia Ireland
Kenya Myanmar Isle of Man
! Lesotho Nepal ! Italy
Liberia Oman Kazakhstan
Libya Pakistan Kosovo
Madagascar Palestine Latvia
Malawi Philippines Liechtenstein
Mali Qatar Lithuania
Mauritania Saudi Arabia ! Luxembourg
Mauritius Singapore ! Macedonia, FYR
Morocco Sri Lanka ! Malta
Mozambique Syrian Arab Republic Moldova
Namibia Tajikistan Monaco
Niger ! Thailand Montenegro
Nigeria Timor-Leste ! Netherlands
Rwanda Turkmenistan ! Norway
Sao Tome and Principe United Arab Emirates ! Poland
Senegal Uzbekistan ! Portugal
Seychelles Vietnam ! Romania
Sierra Leone Yemen, Rep. Russian Federation
Somalia ! San Marino
" ! South Africa Serbia
South Sudan Slovak Republic
Sudan ! Slovenia
Tanzania ! Spain
Togo Sweden
Tunisia ! Switzerland
Uganda ! Turkey
Zambia Ukraine
! Zimbabwe ! United Kingdom
" Legal Adult Use ! Legal Medical

© ©
N ENWE W
F RFORN
OTNI ET IRE R
G IHGTHS T R
| ENWE FWRFORN
A .OCM
O M| 37
| 37
reational use, the legal regulated markets command just a Specifically, the federal legalization of cannabis in Canada has
fraction of the global demand for cannabis. provided an avenue for the influx of capital, and an oppor-
tunity for more sophisticated stakeholders to invest in the
The value of the current annual worldwide demand for can- expansion of legal markets across the globe.
nabis is an estimated $344.4 billion USD, based on both the
estimated consumption levels and current market prices for For more insights into the global cannabis demand,
cannabis flower in each country. Outside of the few countries please see our 2019 Global Cannabis Report which details
that have legalized recreational use of cannabis, nearly all of leading global and regional trends, including the impli-
the global demand is currently being met by the illicit market. cations of a growing transnational cannabis economy.
The rise of a global cannabis economy and the entrance of

sophisticated stakeholders has highlighted data deficiencies
in cannabis and an opportunity to establish global standards.
TOTA L E S T I M AT ED VA LU E O F C A N N A B I S D E M A N D B Y R EG I O N
( E S T I M AT E I N $ U S D B I L L I O N S )
$250
Global Demand Value

$200
$344.4 Billion
$150 Error bars shown depict range of uncertainty
$132.9 due to pricing variation within region.
$100 $85.6
$68.5
$USD BILLIONS
$50
$37.3
$9.8 $8.7
$1.7
$0
Asia North America Europe Africa Latin America Oceania Caribbean
© ©
N ENWE W
F RFORN
OTNI ET IRE R
G IHGTHS T R
| ENWE FWRFORN
A .OCM
O M| 38
| 38
KEY INDUSTRY
TRENDS In states with no legal adult-use market, there is the
possibility for adult-use consumers “recreational
consumers” to participate in the legal medical
market when there are lower barriers to patient
entry through expansive qualifying condition lists
that include conditions that can be relatively hard to
REGUL ATORY TRENDS verify such as chronic pain or anxiety (compared to
cancer or terminal illness). Conversely, in states that
In states that have legalized cannabis for either have legalized both medical and adult-use cannabis
medical or adult use (or both), the details of the sales, there are consumers purchasing from adult-
chosen regulatory structure are key drivers of total use dispensaries who are using cannabis to treat
program size and growth. Some of the key regu- medical ailments – but choose to purchase from
latory distinctions that have the greatest impact adult-use dispensaries.
on legal market sales are:
• The chosen integration approach of

adult-use sales in states with existing
New Frontier Data Consumer Survey
medical cannabis programs
Reveals Consumers’ Motivations for
Cannabis Use are Not Limited by their
• The number and types of approved
qualifying conditions in medical markets Home State’s Market Type
• Availability and accessibility of retail outlets New Frontier Data conducted an extensive con-
• Product type restrictions sumer survey in late 2018 to develop greater
• Home cultivation laws insight into who the cannabis consumer is, how
and why they consume, and their views about
Nuances in States cannabis and where it fits into their lives and our
Operating Dual Medical society. As part of this survey, cannabis consum-
and Adult-Use Programs ers in both legal medical and adult-use states were
surveyed about their reasons for use.
From a regulatory perspective, states have chosen
to legalize cannabis based on type of use: either
NOTE: The study is based on a survey of over 3,000
for medical use to treat a specified list of medical
adult cannabis consumers in the U.S. Cannabis con-
conditions, or for “recreational” (adult-use).
sumers, or users, are herein defined as individuals who
However, the classification of a medical vs. a rec-
have used cannabis at least once during their lifetime,
reational consumer is not black and white - there
and intend to use, or are open to using, cannabis
is extensive cross-pollination of consumer types
again for either medical or adult-use purposes.
across both markets, and where these consumers
are making their purchases depends heavily on the
regulated environment of their home state.

“M ED I C A L” V S . “ R EC R E AT I O N A L” U S E B Y H O M E S TAT E M A R K E T T Y P E
Adult-Use CBD-only/Illicit
Medical Markets U.S. Average
Markets Markets
Only Medical Use 10% 12% 9% 10%
Primarily Medical Use 26% 21% 21% 22%
Primarily Recreational Use 36% 33% 35% 35%
Only Recreational Use 28% 34% 35% 33%
Source: New Frontier Data 2018 Cannabis Consumer Survey
" M E D I C A L" V S . " R EC R E AT I O N A L" U S E While medical-only use rates are slightly higher in
B Y H O M E S TAT E M A R K E T T Y P E legal medical markets than in adult-use markets
(12% vs. 10%), rates of identifying as a “primar-
New Frontier Data’s 2018/19 Consumer Trends ily” medical user are higher in adult-use markets
Report, produced in partnership with MJFreeway, (26%) than in medical markets (21%).
revealed groundbreaking new insights into evolving
cannabis consumer behavior. The study explored It is likely that the decreased stigma, increased
why and how adults consume cannabis, as well as accessibility, and diversification of available forms
examined which socio-economic, cultural, and of cannabis in adult use markets allow consum-
behavioral factors influenced their use and per- ers in those markets to more fully incorporate
spective as cannabis consumers. cannabis into their lives, allowing them to expe-
rience previously unrecognized applications and
As a nationally representative study, the data benefits, and re-categorize some or all of their
enabled unique analysis into how behaviors differ relationship to cannabis as medical. Ironically,
across markets of different legal status. it is owing to adult use legalization that many
consumers are more likely to understand and
Medical Use in Adult-Use Markets recognize the medically therapeutic aspects of
Rates of consumers self-identifying as solely medical their cannabis use.
users of cannabis are fairly consistent across market
types, with approximately 1 in 10 consumers saying Recreational Use in Medical Markets
they only use cannabis to treat a medical condi- Describing one’s use as purely recreational is
tion; this is to be expected, as prevalence of most more common in medical markets (34%) than
medical conditions that can be treated with cannabis in adult-use markets (28%). Rates of iden-
is roughly consistent across the U.S. The remaining tifying as a recreational user (only recreational
9 in 10 consumers of cannabis describe their use use + primarily recreational use combined) are
as at least partially recreational, and a majority of slightly higher in medical markets than in adult-
consumers in all types of markets use cannabis for use markets (67% vs 64%).
both medical and recreational purposes.

K E Y I N D U S T R Y T R E N D S : R E G U L AT O R Y T R E N D S
Cannabis consumers living in fully legal adult- ational. It is the unique regulatory environments
use markets are more likely than consumers in for medical and adult-use cannabis sales in the
either medical-only or illicit state markets to have state - not a strict binary consumption purpose
their cannabis use transcend both medical and - that result in different degrees of medical and
non-medical applications – 62% of users in adult- adult-use program participation.
use markets describe their cannabis use as both for
medical and recreational purposes (vs. 54% of users Variables affecting incentives for patients to
in medical-only markets, and 56% of users in illicit remain in medical market once adult-use has been
or CBD-only markets). This could be a function legalized include:
of greater comfort in exploring different ways in
which cannabis can be used when its legal, coupled • Tax rates (and prices);
with having ready access to a diversity of products • Costs of medical card renewals
and doctor’s visits;
intended to support those diverse applications.
• Convenience of dispensary retail location/
allowance for delivery services;
Bottom Line
Reasons for cannabis use can be situational • Product availability across markets; and
- many individual cannabis consumers define
their reasons for use as both medical and recre-
• Purchase/possession limit
differences across markets.
P R I M A R Y U S E B Y H O M E S TAT E M A R K E T T Y P E
62%
56%
54%
$2.0
34% 35%
28%
12%
10% 9% $0.5
$0.0
Exclusively Medical Use Both Medical & Recreational Use Exclusively Recreational Use
Adult-Use Market Medical Market CBD-Only/Illicit Market

D EC L I N E S I N M E D I C A L PAT I E N T lower tax rates or higher purchase limits than

PA R T I C I PAT I O N I N S TAT E S T H AT allowed for adult-use consumers) are likely to
H AV E L EG A L I Z E D A D U LT- U S E
see greater stability in their medical markets
States that introduced new adult-use markets than states where the rules governing medical
on top of existing, but separate, medical markets and adult-use sales are identical.
have experienced declines in patient participa-
tion and medical sales as the adult-use markets In the most mature adult-use cannabis markets
have grown. However, states that offer special with medical cannabis programs (i.e., Colorado
accommodations for medical patients (such as and Oregon), patient-saturation rates fell signifi-
D EC L I N E S I N M ED I C A L C A N N A B I S PAT I EN T PA R T I C I PAT I O N
F O L LO W I N G A D U LT-U S E L E G A L I Z AT I O N
FIRST MONTH OF
2.5% LEGAL ADULT-USE
35%
CANNABIS SALES
2.1%
average
2.0%
decline**
OF MEDICAL CANNABIS PROGRAM
1.9%
1.5%
1.5%
PATIENT SATURATION
1.0%
0.5%
0.7%
0%
-24 -20 -16 -12 -8 -4 0 4 8 12 16 20 24 28 32 36 41
MONTH OF LEGAL ADULT-USE CANNABIS SALES
Colorado Oregon Nevada Vermont* Massachusetts
Start of State Adult-Use Program Jan 2014 Jan 2016 Jul 2017 Jul 2018 Dec 2018
Note: Patient saturation is defined as the number of registered medical cannabis patients expressed as a percentage of state population
*Vermont does not have legal dispensary sales, but as of July 2018 allows any adult to cultivate and consume cannabis.
**Average decline across the above listed states since adult-use legalization

R I S I N G PAT I EN T PA R T I C I PAT I O N I N M ED I C A L- O N LY L EG A L M A R K E T S
4.0%
Data cleanup was
performed by the New
3.5% Mexico Dept. of Health
in Oct. 2016 that
resulted in a reduction
The decline in patient in reported active
3.0% counts in Montana patient counts.
in Aug 2016 is a
result of a delayed
2.5% 2011 law that took
October 2016
effect and restricted
providers to only
2.0% three patients apiece.
August 2016
PATIENT SATURATION
1.5%
1.0%
0.5%
0%
Jan 2014 Jul 2014 Jan 2015 Jul 2015 Jan 2016 Jul 2016 Jan 2017 Jul 2017 Jan 2018 Jul 2018 Jan 2019 Jul 2019
Arizona Florida Montana New Mexico

Note: Patient saturation is calculated as the number of registered medical cannabis patients expressed as a percentage of the state population.
cantly once adult-use sales began. With long lags patient saturation (the ratio of registered patients
between legalizing medical cannabis programs and to the overall population) exceed 4% if adult-use
adult-use sales, both Colorado and Oregon saw is not legalized in the near term.
patient saturation rise to 2% before experiencing
a patient decline. Massachusetts, Nevada, and Implications of State Approved
Vermont had significantly shorter time frames Qualifying Conditions on
between legalizing medical programs and adult- Patient Growth and Sales
use sales, resulting in peak patient-participation
rates roughly half of Colorado’s or Oregon’s. The number of registered patients in the
United States treating medical conditions with
On the other end of the spectrum, medical can- cannabis has surpassed 2.3 million, and that
nabis states that have not also passed adult-use number is projected to nearly double by 2025
laws are expected to see continued strong growth (under the current status of state legalization
in patient participation compared to states where across the U.S.) as new states that have recently
adult-use measures have been passed. Arizona, legalized medical programs begin sales through
Florida, Montana, and New Mexico could all see registered dispensaries.

N U M B ER O F R EG I S T ER ED M ED I C A L C A N N A B I S PAT I EN T S I N T H E U. S .
201 4-201 9, I N M I L L I O N S
2.3
2.0
1.9
1.7
1.6
1.4
2014 2015 2016 2017 2018 2019

(as of August)
Note: Included are New Frontier Data estimates for states that do not track or report the number of patient registrations
(i.e., Washington, California, and Maine).
PA I N I S T H E M O S T W I D ELY C I T ED CO N D I T I O N F O R U S E
I N L EG A L M ED I C A L C A N N A B I S M A R K E T S
93%
89% 88% 87%
84% 345,672
Total number of pain
patients in CO, AZ,
OR, NV, HI & NM
REPORTING CONDITION
51%
% OF TOTAL PATIENTS
34%
11% 12% 13%

9%
1%
Colorado Arizona Oregon Nevada Hawaii New Mexico
Pain % PTSD %
Note: Data from July 2019


The expansiveness of state qualifying condition Patients surveyed also report that cannabis
lists is one of the key determinants of patient works: Among all patients who used cannabis
reach and participation in legal medical markets. to treat a pain-related medical condition, more
States which permit the broadest lists of condi- than nine in 10 reported that their conditions
tions (particularly those which include ailments improved, and seven in 10 said their conditions
associated with high rates of patient registration, improved significantly. The reported improve-
such as chronic pain or PTSD), reflect a far greater ments were highest for chronic pain (at 97%)
potential population pool than those states which and migraines (96%).
limit medical cannabis accessibility to only cancer
patients and the terminally ill. Where medical cannabis is legal and pain is an
accepted condition for the patient registry (some
PAT I E N T PA R T I C I PAT I O N states do not recognize it as a qualifying condi-
P R O P E L L E D B Y C H R O N I C PA I N tion), chronic pain is the most frequently cited
condition, accounting for two-thirds or more of
According to the National Institutes of Health, registered patients in states which include it as a
among all U.S. adults, nearly 40 million (17.6%) qualifying condition for use of medical cannabis.
report suffering from severe pain, while about
25.3 million (11.2%) complained of experiencing Across the states of Colorado, Arizona, Oregon,
daily pain throughout the previous three months. Nevada, and Hawaii - five key mature medical
markets that all accept chronic pain and PTSD as
The National Academies of Sciences, in a seminal qualifying conditions - nearly 90% of registered
2017 report, The Health Effects of Cannabis and medical cannabis patients report chronic or severe
Cannabinoids, concluded after reviewing over pain as the primary illness being treated. Overall,
10,000 research papers on medical cannabis pain, post-traumatic stress disorder (PTSD), and
published since 1999, that there was “substantial muscle spasticity, respectively, are the top three
evidence that cannabis is an effective treatment most commonly cited conditions reported by
for chronic pain in adults.” The report summa- patients seeking medical cannabis in states that
rized the research review by stating “In adults with include them as qualifying conditions for use.
chronic pain, patients who were treated with can-
nabis or cannabinoids are more likely to experience P OT E N T I A L F O R C A N N A B I S A S A
a clinically significant reduction in pain symptoms.” SUBSTITUTE FOR OPIOIDS
According to New Frontier Data’s 2018 Cannabis The opioid epidemic has grown to a crisis of national
Consumer Survey, 42% of all cannabis users – not proportions. On average, 130 Americans die daily
just medical consumers – use cannabis to manage from opioid overdoses, more than those killed either
pain, and the five most common conditions reported in car accidents, from breast cancer, or by guns.
among self-identified, medical-use consumers are
anxiety (46%), pain (39%), insomnia (27%), arthritis Patient-reported efficacy of cannabis is leading
(25%), and migraine headaches (25%), respectively. a growing number of consumers to substi-

3 WAV E S O F T H E R I S E I N O P I O D OV ER D O S E D E AT H S
10
Rise in prescription
opioid deaths.
DEATHS PER 100,000
4 Wave 1 Rise in heroin

overdose deaths.
Rise in synthetic opioid
Wave 2
POPUL ATION
overdose deaths.
2
Wave 3
0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Heroin Commonly Prescribed Opioids Other Synthetic Opioids

Natural & Semi-Synthetic Opioids & Methadone e.g., Tramadol & Fentanyl, prescribed or illicitly manufactured
Source: Source: CDC, National Vital Statistics System Mortality File
tute pharmaceuticals – including opioids – for With a growing body of research suggesting that
medical cannabis. cannabis may hold some promise in helping mit-
igate the rates of dependence and overdoses,
there is growing public support for the expansion
of legal access to medical cannabis for those most
Of the cannabis consumers vulnerable to risks from opioid abuse, particularly
surveyed in the 2018 New patients with chronic or severe pain.
Frontier Data Cannabis Many states have already turned to cannabis to

Consumer Survey, 65% of mitigate the crippling opioid crisis:
patients reported replacing • Inconditions

Pennsylvania, the list of qualifying
is being expanded to include
at least some pain approved uses for those in opioid
addiction therapy or cancer remission.
medications with cannabis.
• InYork2018 the Governor of the state of New
signed legislation allowing medical
cannabis to be used as an alternative

I M PAC T O F C A N N A B I S O N PAT I EN T S M ED I C A L CO N D I T I O N S
97% 96% 95% 92%

100%
80%
26% 24% 22%
27%
60%
40%
20%
72% 69% 72% 70%

0%
Chronic or Intractable Pain Migraine Neuropathy Fibromyalgia
Improved Significantly Improved Slightly Improved Total

Source: Source: New Frontier Data 2018 Cannabis Consumer Survey
to opioids, and the program saw an It is worth noting that simply legalizing medical
immediate boost in patient registrations. cannabis may not immediately lead to use of can-
nabis as a substitute for other medications. As
• InNew2019, four additional states have followed
York’s lead and amended their previously mentioned, politically conservative
laws to allow patients to access medical states have been slowest to advance legal mea-
cannabis as an opioid alternative: New sures, reflecting voter skepticism and concern
Jersey, Illinois, Colorado, New Mexico. about the impact of legalization. Given that envi-
ronment, aggressive education efforts would be
States with the Highest Rates of Opioid needed to engage both patients and their health-
Prescriptions: Hotbed in the South care providers to orient them to the applications
Cannabis shows strong potential to be a substi- (and limitations) of medical cannabis.
tute (or displacing complement) to opioid-based
treatments, especially in states which have seen Oklahoma (ranked 5th in state opioid prescription
the most acute increases in opioid dependence rates) illustrates the catalytic effect of a proactive
following years of soaring opioid prescription rates. patient engagement strategy. Just one year into
In states like Alabama, where cannabis remains the operation of a legal medical cannabis market,
illegal, medical providers wrote 107.2 opioid pre- the state already has the highest saturation of
scriptions for every 100 persons in 2017, the medical cannabis patients in any legal medical
highest prescribing rate in the country and almost market in the country. The next few years of opioid
twice the national average prescription rate of data from the CDC and medical program data
58.7 prescriptions. from the state of Oklahoma will provide further

2017 S TAT E O P I O I D P R E S C R I P T I O N R AT E S
NUMBER OF OPIOID PRESCRIPTIONS PER 100 PERSONS

< 64.1 64.1 - 82.9 83.0 - 107.1 > 107.1
Source: U.S. Centers for Disease Control and Prevention
insight into the tangible effects that legal medical polypharmacy behavior and attitudes among
cannabis can have on opioid use in the regions Strainprint app users in Canada, all of whom are
where it is most prescribed. registered medical cannabis patients. The major-
ity of patients reported using another treatment,
Data Collected by Strainprint outside of medical cannabis, to manage their
TechnologiesTM Reveals Important symptoms - however their reported usage varied
Insights on the Prevalence of depending on the symptoms treated.
Polypharmacy Among Medical

On average, among those identifying that they
Cannabis Patients
treated a particular symptom, 48% of patients
Amidst the expansion of state-level medical reported replacing their pharmaceutical drugs
cannabis legalization in the U.S., very little with cannabis over the previous 18 months. One-
research has been conducted on the efficacy third of patients reported reducing prescription or
of medical cannabis treatment when used in OTC drugs when adding cannabis to their treat-
combination with other pharmaceutical or OTC ment, and 19% have continued using prescription
drugs. Strainprint Technologies conducted a medications as prescribed while adding cannabis
custom study in February 2019 to understand to their treatment.

Patients with pain-related symptoms (headache, OTC while adding medical cannabis to their
inflammation, and muscle pain) reported the treatment plan.
highest percentage of reducing prescriptions/
Half of all patients reported reducing their molec-
ular drugs for joint and muscle pain. For both joint
PAT I EN T S U S I N G C A N N A B I S and muscle pain, it was more common among
patients to reduce/switch from OTC drugs to
S W I TC H E D F R O M R X R E D U C E D R X O R OTC
O R OTC TO C A N N A B I S + ADDED C ANNABIS cannabis compared to reducing/switching opioids
48% 34% for cannabis. This reflects the use of opioids for
treating more severe pain compared to Tylenol or
C O N T I N U E D R X O R OTC Advil. However, the data also shows that roughly
+ ADDED C ANNABIS
one in five patients have either reduced or stopped
19% using opioids as a result of cannabis.
Note: Details on study methodology can be found in the

“Methodology” section of this report
Source: Strainprint Technologies Polypharmacy Report
PAT I EN T S U S I N G C A N N A B I S FO R PH Y S I C A L S YM P TOM S
S W I TC H E D F R O M R X R E D U C E D R X O R OTC C O N T I N U E D R X O R OTC
O R OTC TO C A N N A B I S + ADDED C ANNABIS + ADDED C ANNABIS
41% 43% 16%

MUS CLE PAIN M USC L E PA I N M U S C L E PA I N
36% 55% 9%
HE ADACH E H E A DAC HE HE A DAC HE
27% 58% 15%
INF L AMMATION I NF L A M M AT IO N I N FL A M M AT I O N
39% 46% 14%
JO INT PAIN JOI N T PA IN J O I N T PA IN
36% 54% 10%
JO INT S TIFFN ESS JOI N T S T IFFN E S S J O I N T S T IFFN E S S
45% 41% 14%
NAU SEA NAUS E A N AU S E A
50% 35% 15%
NE RVE PAIN NE RV E PA IN N E R V E PA I N
43% 39% 18%
MUS CLE SPAS MS M USC L E S PA S M S M U S C L E S PA S M S
45% 41% 14%
GAS TRO PAIN G A ST R O PA I N G A S T R O PA I N
41% 41% 21%
Note: Details on study methodology can be found in the “Methodology” section of this report
Source: Strainprint Technologies Polypharmacy Report

New Frontier Data’s Consumer Significant additional research is needed to deter-

Research Drives New Insight into mine the most effective way to titrate and dose
Evolving Attitudes and Behaviors cannabis for pain patients, yet studies to date suggest
significant social benefits to allowing cannabis use
As part of the 2018/19 New Frontier Data con- among pain patients, including: lower rates of opioid
sumer survey, we surveyed more than 1,700 use, dramatic declines in opioid overdose deaths,
potential consumers – defined as those who had and lower expenditures on prescription drugs.
not used cannabis before but indicated they would
be open to trying it in the future - about their These results also suggest that the tension
potential future use of cannabis. Of the population between pharmaceutical companies and legal
of people surveyed, 48% cited pain management cannabis will likely continue for many years. Still,
as the type reason they might choose to consume at a time when tens of thousands of Americans
cannabis in the future. are dying from opioid overdoses, and millions more
are dealing with opioid addiction, there is growing
Pain management and reasons related to decom- urgency for lawmakers, drug manufacturers, and
pression from stress (anxiety reduction, stress health-care providers to find ways to solve this
relief, relaxation) were among the top reasons catastrophic epidemic, including research into the
cited by both potential and current consumers. role which cannabis may play.
TO P R E A S O N S C I T ED B Y P OT EN T I A L C A N N A B I S CO N S U M ER S
A S CO N S I D ER AT I O N S F O R U S E
Pain Management 48%
Anxiety Reduction 42%
Stress Relief 39%
Relaxation 37%
Improving Sleep Quality 30%

Treating a
Medical Condition 30%
Falling Asleep 25%

Increasing 21%
Overall Wellness
Enjoying
Social Experiences 17%
Being More Energized 16%
0% 10% 20% 30% 40% 50%

Case Study: Oklahoma O KL A H OM A BY T H E N UM B ER S
Oklahoma is the most recent state to legalize YE AR MEDIC AL USE

20 1 9 P O P U L AT I O N
medical cannabis, and has shattered previous norms LEG ALIZED
set by existing medical cannabis programs. The 3,978,065 2018

state chosen regulatory model is an outlier, in that
it doesn't restrict patient participation to a limited TOTA L N U M B E R O F PA S T Y E A R PA S T M O N T H
C A NN A B IS CONSUMERS U S A G E R AT E U S A G E R AT E
number of conditions. A physician can write a rec- past year users, 2019 20 1 9 2019
ommendation for any condition for which they 400,109 13% 7%
believe medical cannabis could be helpful.
REGIS TERED PAT I E N T LEG AL M ARKE T
This low barrier for patient qualification, coupled PAT I E N T S R AT E FOREC A S T
with minimal costs to join the program, and an
aggressive campaign to register patients by local 175,700 4.4% 22.5%
advocates, has driven patient participation far
O K L A H O M A M ED I C A L C A N N A B I S S A L E S P R O J EC T I O N S
$1,017
$1,000
$959
$827
$694
$569
$301
$USD MILLIONS
2019 2020 2021 2022 2023 2024 2025

ahead of initial expectations. Just one year after Importance of Licensing Policy
voters approved medical cannabis, Oklahoma has and Retail Dispensary Access
the highest saturation rate of patient registrations
of any medical cannabis program in the country,
Case Study: Lessons from Oregon
with 4.4% of the state’s population registered as
a medical cannabis patient as of August 2019.
O R EG O N BY T H E N UM B ER S
With no limitations on plant-touching licensing,
the number of business licenses awarded has 20 1 9 YE AR MEDIC AL Y E A R A D U LT-U S E
grown rapidly as well, with more than 3,800 culti- P O P U L AT I O N USE LEG ALIZED LEG ALIZED
vator licenses, over 1,000 processor licenses, and 4,246,716 1998 2014
over 1,700 dispensary licenses already approved
as of August 2019. TOTA L N U M B E R O F PA S T Y E A R PA S T M O N T H
C A NN A B IS CONSUMERS U S A G E R AT E U S A G E R AT E
past year users, 2019 2019 2019
Unlike other states with medical cannabis pro- 949,082 28% 21%
grams, wherein some patients choose to register
for a medical cannabis card in order to have an REGIS TERED PAT I E N T LEG AL M ARKE T
affirmative defense from criminal prosecution but PAT I E N T S R AT E FOREC A S T
are not active purchasers in their state’s licensed
medical dispensaries, Oklahoma expects nearly 27,892 0.7% 5.8%
full participation by its registrants due to both the
growing accessibility of legal dispensaries under
the open regulatory structure and the restricted Oregon was one of the earliest adopters of both
access to legal cannabis in neighboring states. medical and adult-use legalization reform, pro-
viding a longitudinal case study on the impacts of
Total annual legal sales of medical cannabis are regulatory decisions surrounding licensing on can-
estimated to reach $300 million in 2019, and are nabis cultivation and sales. Just as consumers are
projected to surpass $1 billion by 2025. sensitive to changes in price (elasticity of demand)
due to the existing illicit market for cannabis, for
the first time, we are seeing indications about the
elasticity of supply (suppliers choosing to enter or
exit the market based on drastic movements in
wholesale pricing) in Oregon’s market.
SUPPLY A ND D EM A ND IMB A L A N CE S
Supply and demand imbalances in Oregon went
relatively unnoticed prior to the fall of 2017. The
2016 harvest was low, as the outdoor harvest was
nearly decimated by a late season storm, fol-

O R EG O N L EG A L C A N N A B I S S A L E S
201 5-2025 E S T.
$1,040 $1,045 $1,047 $1,056

$1,012
$910
$770
$714
$658
$541
IN $USD MILLIONS
$272
MARKET SIZE
$253 $420
$557
$662 $808 $916 $947 $957 $963 $977
$253 $269 $238 $157 $108 $101 $97 $92 $88 $84 $80
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Legal Adult-Use Market Legal Medical Market
O R EG O N ' S FA L L I N G F LO W ER P R I C E S
P R I C E P E R P O U N D, O C T 201 6 - M A R 201 9
Avg. Price per Pound of Flower Average Monthly

$5,000 Decline
$4,440
64% 3.3%
prices down
$2,822
from
$4,000 $3,557 Oct 2016 decline per month over
the last 30 months
$3,000
$2,410
$2,000 $1,618
$USD PER POUND
$1,000
$0
Oct 2016 Apr 2017 Oct 2017 Apr 2018 Oct 2018 Mar 2019
Source: Oregon Liquor Control Commission

lowed by the 2017 harvest, which set a record estimated the number of applications they would
high. Seemingly overnight, the state went from receive. This resulted in a total number of licensed
having seasonal but stable prices and an adequate cultivators (called “licensed producers” in Oregon)
supply to meet existing demand, to significant that far exceeded initial forecasts, and an eventual
excesses and dramatically falling prices. supply that significantly outsized total demand for
cannabis in the state.
A wholesale market experiencing rapid price declines
outside of expected ranges made it extremely dif- While the resulting price declines were good for
ficult for investors to adequately asses the market consumers, (and helped to spur new innovation
and for business owners operating in the state to find in non-flower product development among cul-
buyers of excess supply. Fortunately for Oregon, tivators who were looking for ways to monetize
wholesale supply and demand appear to be finding reserves of excess supply), the structural supply and
an equilibrium of sorts, as monthly declines in retail demand imbalance was too large for regulators to
prices have been slowing in recent months. ignore. In June of 2018, the OLCC took a “pause”
in processing new applications, which essentially
UNLIMITED LICENSURES RE VISITED left over 1000 cultivation licenses in limbo. They
Early efforts by Oregon’s regulators to consolidate also stepped up enforcement of existing licensees,
illicit and legal suppliers into one regulated market looking to eliminate noncompliant operators.
have had mixed results. Oregon’s regulators set
low barriers to entry to entice medical and illicit During the 2019 legislative session, Oregon leg-
growers to enter into the legal market, but under- islators took further action to address oversupply
S TAT U S O F M A R I J UA N A L I C EN S E A P P L I C AT I O N S
A S O F 8:0 0 A M W E D N E S D AY, A U G U S T 1 4 , 201 9
Without
Approved Ready for GRAND
License Active Assigned Approved
Not Paid Assignment TOTAL
LUCS
Laboratory 19 0 5 0 0 24
Processor 234 0 104 126 50 514
Producer 1138 2 241 555 93 2029
Retailer 657 1 86 122 71 937
Wholesaler 165 0 50 67 30 312
Research 0 0 3 0 1 4
GRAND TOTAL 2213 3 489 870 245 3820
Source: Oregon Liquor Control Commission
© ©
N ENWE W
F RFORN
OTNI ET IRE R
G IHGTHS T R
| ENWE FWRFORN
A .OCM
O M| 54
| 54
issues by giving the OLCC authority to limit O U T LO O K

licenses. This will gradually lead to a further tight- In the current state of federal illegality that prohibits
ening of the supply chain as regulatory scrutiny inter-state commerce of cannabis, predicting and
increases, the market consolidates, and existing meeting demand with adequate supply will be a key
license applicants drop out of the approval queue. challenge facing regulators and operators in each
legal state market. Colorado has been relatively
L AW E N F O R C E M E N T successful in this by mandating all cultivators to
P R I O R I T I Z AT I O N demonstrate that supply from their current capac-
Law enforcement of illicit cannabis operators in ity is sold before permitting expansion. Oregon
the state has been almost nonexistent. In counties recently passed legislation to allow for exports of
that issued a large number of cannabis licenses, cannabis to other legal states, however, for Oregon,
law enforcement and regulatory inspectors had and other states to launch export markets, federal
limited bandwidth and resources to monitor the law would need to be wholly rewritten, lifting
legal industry - let alone the illicit one. federal prohibition and allowing interstate com-
merce. While support for these federal changes
A 2018 audit by the secretary of state’s office are building, it remains far from the critical mass
noted a general lack of enforcement in the required to overcome deeply entrenched resistance
adult-use, medical, and illicit cannabis markets to legalization in Congress.
in Oregon, prompting an allocation of additional
funds by the legislature, however gaps in enforce- In the mantime, between bottoming wholesale
ment still remain. prices forcing operators to exit the market, and
regulator’s action to address the over-issuance
Licensees in the adult use program are now forced of production licenses, the market in Oregon will
to compete with lower-cost illicit supply in the begin to consolidate. Fewer companies will be
state, while also suffering the brunt of legal and able to weather long-term depressed price levels
regulatory enforcement. While little enforcement and larger groups looking for scale will take over
is present in the medical programs, operators in smaller ones struggling to stay profitable. It is also
adult-use programs are seeing increasing penal- entirely possible that state regulatory agencies
ties, fines and suspensions, even for self-reporting move to consolidate the medical and adult use
compliance violations. programs into one, sharing the regulatory burdens
and resources to address the enforcement gaps.
Until there is a balance in enforcement priorities
and a significant reduction in illicit suppliers, While not perfect in its execution, Oregon has
Oregon has very few tools at its disposal that provided an important case study for other states
will dramatically change the current regulatory looking for guidance on how to regulate issues in
and law enforcement environment. Investors and cannabis legalization. Like the cannabis industry
operators in the state will need to be extremely in general, Oregon still has some challenges to
vigilant in their attention to detail on all compli- overcome, but regardless of those issues, the
ance-related issues. market is robust and functioning.

KEY INDUSTRY TRENDS: SOCIAL & ECONOMIC TRENDS
SOCIAL AND The short change in direction of opinion seen in

ECONOMIC TRENDS 2014 in both Pew Research Center and Gallup
data coincides with the timing of adult-use in the
Growing National Support first states, suggesting that these historic events
for Legalization brought the topic of legalization into the spotlight
and stoked strong short-term interest and volatility
Support for cannabis legalization is one of of the collective opinion. The positive momentum in
the fastest-evolving social issues in the U.S. support resumed after one year, however, and has
According to the Pew Research Center, 62% of been growing over the last four years among the
Americans support full legalization: up from 41% legalization of eight additional adult-use markets.
in 2010, and double what it was in 2000 (31%).
The General Social Survey and The Gallup Poll, C A N N A B I S C O N S U M E R S S PA N T H E
two other leading institutions reporting on long- RANGE OF POLITICAL PHILOSOPHIES
term trends in public opinion on cannabis, both Of the cannabis consumers surveyed in the 2018
corroborate Pew’s results. The GSS pegs support New Frontier Data Cannabis Consumer Survey,
for cannabis legalization at 62% while the Gallup cannabis use is highest among independents and
Poll shows the highest support level across the lowest among staunchly conservative adults with
three institutions, at 66%. consumers being more likely to report being lib-
erals than conservatives.
U. S . S U P P O R T F O R C A N N A B I S L EG A L I Z AT I O N
201 0-201 8
70%
60% 52%
62%
50%
34%
40%
30% 41%
20%
10%
0%
Mar 2010 Mar 2011 Mar 2012 Mar 2013 Mar 2014 Mar 2015 Mar 2016 Mar 2016 Mar 2018
Sep 2010 Sep 2011 Sep 2012 Sep 2013 Sep 2014 Sep 2015 Sep 2016 Sep 2017 Sep 2018
Yes, Legal No, Illegal
Source: Pew Research Center

U. S . S U P P O R T F O R F U L L L EG A L I Z AT I O N
1 9 69 - 201 8
90%
80% 66%
70% 84%
60%
50%
40%
30%
12%
20% 32%
10%
0%
1969 1974 1979 1984 1989 1994 1999 2004 2009 2014 2018
Yes, Legal No, Illegal
Source: Gallup Opinion Poll on Support for Legalization
P O L I T I C A L V I E W S A M O N G C A N N A B I S CO N S U M ER S
25%
23%
20%
20% 19% 19%
15%
10%
10% 9%
5%
0%
Strongly Liberal Moderately Liberal Independent Moderately Strongly Apolitical
Conservative Conservative

According to the Pew Research Center, nearly adults and the ageing out of prohibitionist views
seven-in-ten Democrats (69%) say marijuana that tend to exist across older segments of the
use should be legal, as do 68% of Independents. population. The long-term trends in increasing
Republicans are divided, with 45% in favor of support are seen across all age groups, illustrating
legalizing marijuana and 51% opposed. Still, the that support for legalization is a durable genera-
share of Republicans saying marijuana should be tional trend. With a strong and growing majority
legal has increased from 39% in 2015. now supporting full adult-use, the momentum
for expanding state legalization and adopting
Support for cannabis legalization is not being federal- prohibition reform seems likely to con-
driven solely by changes in opinion across young tinue growing in the years to come.
W I D E PA R T I S A N G A P I N O P I N I O N S A B O U T L EG A L I Z I N G M ED I C A L U S E
% W H O S AY T H E U S E O F M A R I J U A N A S H O U L D B E . . .
Illegal Legal
Total 34% 62%
Men 30% 68%

Women 38% 56%
White 30% 66%

Black 39% 56%
Hispanic 50% 48%
Portgraduate 30% 63%

College Degree 32% 64%
Some College 30% 67%
High School or Less 40% 56%
Republican 51% 45%

Democrat 28% 69%
Independent 28% 68%
Lean Republican 36% 59%
Lean Democrat 23% 75%
White Evangelical Protestant 52% 43%

White Mainline Protestant 31% 64%
Catholic 44% 52%
Unaffiliated 19% 79%
Source: Pew Research Center

U. S . C A N N A B I S L EG A L I Z AT I O N S U P P O R T B Y AG E G R O U P
1 97 3-201 8
80% 72%
70% 64%
60%
50% 57%
40%
46%
30%
20%
10%
0%
1973 1978 1983 1988 1993 1998 2003 2008 2013 2018
18-34 35-49 50-64 65+
Source: National Opinion Research Center, General Social Survey
Social and Cultural Evolution:

Consumer Trends
Nearly 40 million adults consume cannabis at least the threat of law enforcement, nor dire warnings
once per year in the U.S., collectively spending of health effects (e.g., the infamous “This is your
nearly $75 billion annually on cannabis in 2018 brain on drugs” campaign from the late 1980s)
(both legal and estimated illicit market spending have quelled public demand for cannabis in
combined). The size and growth of the consumer either unregulated or legalized markets. Despite
population is shifting attitudes toward cannabis and growing recognition of the vast number of canna-
driving a more pragmatic debate on legalization. bis consumers, there has been little social science
dedicated to understanding who consumes can-
Regardless of individual impressions about cannabis, their motivations, or behaviors. However,
nabis, the contemporary reality is that a large with investors’ interest and entrepreneurs now
and growing population of consumers enjoys racing to build the legal market, there is a growing
regular access to cannabis, and many have common urgency to better understand cannabis
deeply integrated it into their lifestyles. Neither and its consumer culture.

New Cannabis Consumer Profiles T H E AV E R AG E

C ANNABIS CONSUMER
Reveal Rapidly Evolving Attitudes,
Behavior, and Use
Average Age
New Frontier Data conducted an extensive Consumers between the ages of 25 and 44
consumer survey in 2018 of over 3,000 adult comprise almost half (45%) of cannabis consum-
cannabis consumers in the U.S. to develop ers, while those ages 18-24 only accounted for
greater insight into who the cannabis consumer 11%. This finding agrees with generally accepted
is, how and why they consume, and their views research that there are higher rates of cannabis
about cannabis and where it fits into their lives use among younger adults.
and our society. New Frontier Data’s consumer
research shows that cannabis is used by a diverse The most conservative views on cannabis are often
cross-section of society, and as millions of con- held by older adults, but increased awareness of
sumers slowly emerge from the shadows, they the plant’s medical uses – especially for age-re-
challenge perceptions about those who consume lated conditions such as joint pain – are helping
cannabis, as well as the demonization of cannabis to soften attitudes toward access and use within
consumers as anonymous “others”. the country’s rapidly aging population.
C A N N A B I S CO N S U M ER S B Y AG E
25% 24%
21%
20%
18%
17%
15%
11%
10%
8%
5%
1%
0%
18-24 25-34 35-44 45-54 55-64 65-74 75+

F R EQ U EN C Y O F U S E B Y C U R R EN T CO N S U M ER S
40%
36%
35%
30% 29%
25% 23%
20%
15% 13%
10%
5%
0%
At least once per day Once to a few times a week A few times a month Almost never
to a few times a year
A M O U N T S P EN T P ER P U R C H A S E
35%
35%
30%
60%
spend $50
or less
25% 24% 24%
20%
15%
12%
10%
5%
5%
0%
Under $20 $20-50 $51-$100 $101-$200 $201+

Usage Behaviors Younger cohorts of cannabis consumers are more

Over one-third (36%) of consumers reported likely to spend more on cannabis than are older
using cannabis daily, and more than half (59%) consumers. Only 19% of 18-34 year-old consum-
used cannabis at least once a week. While a ers indicated spending less than $20 per purchase,
majority (55%) reported they had not changed compared to 23% of 35-54 year-olds and 34% of
their frequency of consumption in the past year, consumers aged 55+.
a considerable proportion (45%) had experienced
a change in frequency: 27% reportedly increased Reasons for Use
their frequency of intake while 18% decreased. In New Frontier Data’s survey, consumers were
asked to self-identify as medical or recreational
Though use is already frequent for most consumers, users. Overall, two-thirds (68%) of the respon-
73% said they would be more likely to use cannabis dents identified as recreational consumers, and
if it were legal, suggesting that risks of prohibition do one-third (32%) identified as medical consumers.
constrain at least some consumers' use. As legal- Ten percent indicated that they used cannabis
ization expands to more markets and use becomes only medically, while one-third (33%) self-iden-
more socially acceptable, people will be both more tified as exclusively recreational consumers.
likely to admit to consuming, and use more often.
P R E VA L EN C E O F S EL F-I D EN T I F I ED CO N S U M ER T Y P E S
70%
Recreational 68%
60%
50%
40%
35%
Medical 32% 33%
30%
22%
20%
10%
10%
0%
Only Medically Primarily Medically Primarily Recreationally Only Recreationally
Note: Survey respondents did not have to be registered as medical cannabis patients per regulations of their home states to identify as medical users.

TO P 10 R E A S O N S F O R C A N N A B I S CO N S U M P T I O N
Relaxation 66%
Stress Relief 59%
Anxiety Reduction 53%
Improving
43%
Sleep Quality
Pain Management 42%
Falling Asleep 40%
Enjoying Social Experiences 32%
Stimulating Creativity 24%
Increasing Overall Wellness 23%

Making Boring Things
More Interesting 19%
0% 10% 20% 30% 40% 50% 60% 70%
The majority of consumers (57%) do not use sleep related, with 43% of consumers using can-
cannabis exclusively for medical or recreational nabis to improve sleep quality and 40% to assist
purposes, but for a combination of both. in falling asleep.
Over time, the balance between medical and The wellness-focused drivers for consumption
recreational consumers in the overall market will (anxiety and pain management, sleep improve-
evolve as more states legalize medical and full adult ment, etc.) indicates that many consumers are
use, as cannabis-derived therapies become widely using cannabis as a medical therapy, even though
available, and as public acceptance of the social they identify their own use as recreational.
and non-medical wellness uses of cannabis grows.
R E TA I L C A N N A B I S S LO W LY G A I N S
Seven of the top ten reported reasons consumers G R O U N D A S L EG A L I Z AT I O N
E X PA N D S C O N S U M E R AC C E S S
use cannabis were wellness related. The top three
reasons for use include relaxation (66%), stress In legal adult-use markets, 44% of cannabis con-
relief (59%), and anxiety reduction (53%). Of sumers name brick-and-mortar dispensaries as a
particular note, two of the top ten reasons are primary source with only 37% using friends or a

private dealer as a primary source. In medical and New Frontier Data’s Consumer
illicit markets, friends and private dealers collec- Archetypes Break New Ground in
tively were the primary source for 71% and 75% Cannabis Consumer Segmentation
of consumers, respectively.
New Frontier Data’s research reveals revolu-
As the legal market spreads and consumers tionary new insights about the general cannabis
develop more specific preferences for product consumer. Going beyond the binary of medical
types and brands, informal channels such as and adult use, the analysis of millions of consumer
friends and private dealers—which typically have data points inspired the identification of nine spe-
limited selection and sometimes limited infor- cific cannabis consumer archetypes defined by an
mation about what product they are selling—will array of attitudinal, behavioral, and demographic
be less able to meet the needs of increasingly factors. By not defining these consumer groups
sophisticated cannabis consumers. by the regulations of the markets they live in (adult
use, medical use, unregulated), these archetypes
offer better understanding of diverse consumer
ecosystems. Insights into unique consumer seg-
ments not only enable manufacturers to more
effectively tailor their products (and messaging)
PRIM ARY SOURCE OF CANNABIS
40%
40%
35%
30%
25% 24%
20%
20%
15%
10%
5% 4% 4%
5%
0%
Friends Private Dealer Brick & Mortar Online Dispensary I Grow My Own Online Delivery
Dispensary/Store Service

CONSUMERS U. S . C A N N A B I S CO N S U M ER A R C H E T Y P E S
TRADITIONAL MODERN FUNCTIONAL

HE AV Y
LIFEST YLERS LIFEST YLERS DEPENDENTS

14% of consumers 10% of consumers 5% of consumers
The classic consumer. The “Cannabis 2.0” consumer. The extreme consumer.
CONSUMERS
MEDICAL WEEKEND DISCREET

MODER ATE
PURISTS ENTHUSIASTS UNWINDERS

Cannabis for health and wellness. Moderate leisure use. Passionate but secret use.
CONSUMERS
SOCIAL SILVER INFREQUENT

OPPORTUNISTS DABBLERS CONSERVATIVES
LIGHT

The communal sharers. The occasional indulgers. The greying traditionalists.
TRADITIONAL MODERN FUNCTIONAL MEDICAL WEEKEND DISCREET SOCIAL SILVER INFREQUENT

LIFEST YLERS LIFEST YLERS DEPENDENTS PURISTS ENTHUSIASTS UNWINDERS OPPORTUNISTS DABBLERS CONSERVATIVES
Use Daily Daily Daily Varies Daily to Varies Less than once a A few times a Less than once
Frequency weekly month month a month
Spending Highest Highest Average Lower Lower Lowest
on Cannabis High spenders spenders spenders spenders High spenders spenders Lowest spenders spenders spenders
Products
User Type Recreational Wellness Medical Medical Recreational Wellness Purely Purely Purely
recreational recreational recreational
ALL types Variety of Solid edibles,
of products products, plus higher
(joints, solid especially than average Joints
edibles, pipes, alternative use of non- (including
Most Popular Joints, pipes & dabbing, forms (liquid combustible with added Joints Joints, pipes & Joints & Joints
Products solid edibles vape pens, edibles, forms concentrate) solid edibles pipes
liquid edibles, tabletop (topicals, & pipes
topicals, vaporizers, tinctures,
tinctures) topicals, vape pens)
tinctures)
Current Use
of CBD-only No Yes Majority yes Yes No No No No No
Products
Primary Brick-and- Wide variety Brick-and-
Source Private dealer mortar store/ of sources mortar store/ Private dealer Friends Friends Friends Friends
dispensary dispensary
Wide variety Long list of Pain
Long list of Long list of of reasons reasons such management,
reasons and reasons and and activities Medical as stress relief, relaxation,
Consumption activities activities including reasons (pain increased doing low-key Relaxation &
Reasons & involving relating exercising, management, energy/ activities Relaxation & Relaxation & watching TV/
Activities decompression, to general focusing, anxiety creativity & at home socializing socializing movies
socialization & wellness, working & reduction, enhancing (watching TV/
leisure leisure & daily generally sleep) a variety movies, doing
life enhancing of leisure household
daily life activities chores)
Importance Cannabis is Cannabis is Cannabis is a Cannabis is Cannabis is Cannabis Cannabis is not Cannabis Cannabis is not
of Cannabis important to important to major part of not important important to is not important to not generally important to
Use to identity identity identity to identity identity important to identity important to identity
Identity identity identity
Friends Friends
& family & family Friends, Friends & Friends Average rates Friends know Average rates
Openness know; even know; even family & family know. & family of family Friends know about use, of family
About coworkers coworkers coworkers all Coworkers know. Even knowing, but about use, but but family is knowing, but
Cannabis Use often know. often know. know. Very generally do coworkers friends are family is less less likely to friends are
Most say they Most say they public about not know often know slightly less likely to know know slightly less
are public are public use likely to know likely to know
about use about use
High Mid-High Mid Mid-Low Low

to uniquely defined groups, but they also provide Consumer Archetype

deeper understanding into the evolution of can- Spotlight: Modern Lifestylers
nabis as a socioeconomic phenomenon. Embrace Cannabis 2.0
The archetypes vary across markets based on Across all of the New Frontier Data defined heavy
factors including local culture, legal status, and consumer archetypes, the “Modern Lifestyler”
prevalence rates of use. However, the U.S. represents revealing insight into what the future
segments enable stakeholders in all markets to frequent-use cannabis consumer could look like in
understand that cannabis consumers are not a fully legal and regulated marketplace for cannabis.
monolithic, but rather representative of a large
diverse spectrum of society with varied attitudes,
Who are Modern Lifestylers?
consumption habits, and usage behaviors.
• Modern Lifestylers have among the

highest levels of participation in the
workforce—65% are employed full-time,
and 14% are employed part-time.
• They have higher incomes and are

younger than the average consumer.
M O D ER N L I F E S T Y L ER S A R C H E T Y P E
H O M E S TAT E M A R K E T V S . AV E R A G E C O N S U M E R
44%
43%
31%
30%
27%
26%
Legal Adult-Use State Legal Medical Use State Legal CBD-Only or No Law State
Modern Lifestylers Average Consumer

M O D ER N L I F E S T Y L ER S AC H E T Y P E
A G E D I S T R I B U T I O N V S . AV E R A G E C O N S U M E R
41%
26%
24%
21%
18%
17%
14%
13%
11%
8%
5%
1% 1%
0%
18-24 25-34 35-44 45-54 55-64 65-74 75+
M O D ER N L I F E S T Y L ER S A R C H E T Y P E
U S E F R E Q U E N C Y V S . AV E R A G E C O N S U M E R
68%
36%
28%
23%
17%
13%
11%
3%
0% 1%
At least once per day Once to a few times a week A few times a month A few times a year Almost Never

• They are slightly more likely than

average to live in adult-use markets.
Modern Lifestylers are the top spenders on can-
nabis products; nearly three-quarters (73%) spend
• They strongly prefer cannabis to alcohol. more than $100 per month, with 37% spending
more than $200 per month. Modern Lifestylers
Modern Lifestylers are frequent cannabis users— buy large quantities of flower – they are the most
almost all use at least a few times per week. likely group to buy over 1 ounce per month, but
Among all archetypes, Modern Lifestylers also (unlike Traditional Lifestylers) one-quarter selected
consume the widest variety of product forms. non-combustibles (i.e., edibles, pills, topicals, or
tinctures) as their preferred product choice.
While Modern Lifestylers report the most reasons
for consuming, their use typically revolves around Modern Lifestylers who live in fully legal markets
health and wellness. In fact, Modern Lifestylers are the most likely of all consumers to purchase
are the most likely to indicate that they consume from legal sources. More than half (54%) get their
to “increase overall wellness”. Like Traditional Life- cannabis from a business, compared to the overall
stylers, Modern Lifestylers consume throughout average of 28%, with 48% of Modern Lifestylers
the day; half report consuming in the morning and choosing to purchase products at brick and mortar
afternoon, with the majority consuming during the dispensaries, compared to the overall average of
evening (84%). 25%. This group’s diverse product preferences
TO P 7 P R O D U C T F O R M S CO N S U M ED
M O D E R N L I F E S T Y L E R S V S . AV E R A G E C O N S U M E R
64%
57%
53% 54%
43% 43%
35% 34%
33% 32%
26%
18%
15%
11%
Joints or Blunts Edible Pipe or Water Pipe Joints or Blunts Dabbing Handheld Infused
flower only with added concentrates & oils Portable Vaporizer Beverage
concentrates

RE A SONS FOR USE:
INCRE A SE IN OVER ALL WELLNESS
50%
42%
40%
32%
31%
30% 29%
27%
23%
20%
16%
13% 14%
11%
10%
0%
Traditional Modern Functional Medical Weekend Discreet Social Silver Infrequent Survey
Lifestylers Lifestylers Dependents Purists Enthusiasts Unwinders Opportunists Dabblers Conservatives Average
TO P 10 R E A S O N S F O R U S E
M O D E R N L I F E S T Y L E R S V S . AV E R A G E C O N S U M E R
74%
68% 67% 66%
59% 60% 60%
53% 54%
43% 42% 42%

40%
38% 38%
36%
32%
23% 24%
18%
Stress Reduce Relaxation Help Falling Improve Pain Increase Overall Stimulate Increase Enjoy Social
Relief Anxiety Asleep Sleep Quality Management Wellness Creativity Focus/Attention Experiences

B U Y F R O M A B R I C K & M O R TA R S TO R E /D I S P EN S A R Y
50% 48%
40%
35%
34%
30%
27%
25%
22%
20% 19%
17%
15% 16%
10%
0%
Traditional Modern Functional Medical Weekend Discreet Social Silver Infrequent Survey
Lifestylers Lifestylers Dependents Purists Enthusiasts Unwinders Opportunists Dabblers Conservatives Average
reflect their access to retail channels where the would smoke in public were it permitted. Most
product selection is far more extensive than in Modern Lifestylers not only discuss their cannabis
the illicit market. use with friends (90% say that their families know
they consume cannabis, as compared to 76%
Their embrace of non-flower products is also on overall average), they are also more likely to
reflected in their use of CBD –almost all Modern associate with other cannabis consumers – 69%
Lifestylers (98%) have used CBD-only products say that their friends use cannabis, compared to
in the last six months – more than 3x the rate of the overall average of 54%.
the average (30%) – with 90% likely to buy in the
future. For Modern Lifestylers, cannabis use is a Modern Lifestylers are interested in canna-tour-
key part of their lives – more than half (57%) say ism (even more so than Traditional Lifestylers):
that cannabis is an important part of their identity, 90% are more interested in visiting places because
twice the overall average of 28%. A majority of of legalization, and 94% are somewhat-to-very
Modern Lifestylers (60%) are public about their likely to buy cannabis when they visit adult-use
cannabis use, and 69% expect to become even markets. Their passion for cannabis also informs
more public about their use in the future. They their political views – more than two-thirds (68%)
often talk about cannabis, and indicate that they say that a politician’s views on cannabis will be

important to how they vote in the next election, USE OF CBD PRODUC TS BY
compared to the average of 47%. C ANNABIS CONSUMERS
CBD is a non-psychoactive cannabinoid that has

Modern Lifestylers offer compelling insights been at the focus of intense interest in recent
into the leading edge of the evolving cannabis months due to an explosion in popularity fueled
consumer. The diversity of reasons why they use by easing regulations and the growing research on
cannabis, their embrace of myriad product forms, the compound’s wellness effects for many medical
and their proactive integration of cannabis into indications including pain, anxiety and epilepsy.
their lives for a range of reasons underscores how Hemp-derived CBD’s low-risk profile creates the
dramatically the consumer’s orientation is shifting potential to make it a nutritional additive similar to
as social attitudes change and legal access expands vitamins and minerals commonly added to pro-
across the country. cessed foods, and a growing range of potential
applications of CBD (from nutritional supple-
The changes in consumer attitudes and behavior ments to pet food) is propelling hemp-derived
will continue to accelerate as driven by sweeping CBD products into mass-market retailers across
changes in the legal, social and product envi- the United States.
ronment. It is therefore imperative that any
organization focused on serving or understand-
Cannabis consumers report using
ing cannabis consumers closely monitor this
fast-changing sector. CBD products (30%) at roughly twice
the rate of the general population
(14%)1, and represent a unique subset
of CBD consumers as their existing
The diversity of cannabis use lowers barriers to trying
new cannabis products.
reasons why Modern
Lifestylers use cannabis... The 2018 New Frontier Data Cannabis Consumer
underscores how Report revealed some key demographic insights
dramatically the consumer’s surrounding the use of CBD products among

current consumers of high-THC cannabis.
orientation is shifting as
social attitudes change and • Among current consumers of high-THC
cannabis, women are more likely to
legal access expands across purchase CBD-only products than men
the country." • Young people are more likely to try

CBD-only products; 37% of cannabis
1. Gallup, June 19-July 12, 2019

consumers under age 35 had used • Cannabis consumers who purchase

CBD-only products are high-retention
a CBD-only product in the last
6-months, while 21% of consumers customers - 85% of consumers who
55 and older reported doing so purchased a CBD product in the last 6
months are likely to purchase a CBD
• Medical cannabis consumers are twice
as likely to incorporate CBD-only
product again in the next 6 months
products into their lives than are Across cannabis consumers who purchased
recreational cannabis consumers CBD-only products, 57% were female and
43% male. In the 18-24 year-old demographic,
• The heaviest spenders and highest-
frequency users of high-THC cannabis are women reported purchasing CBD-only products
more likely to integrate CBD-only products at twice the rate (15%) of male consumers (7%).
into their cannabis consumption habits than However, this gender difference largely goes
are casual or lower-frequency consumers away within older demographics.
• Gummies, vape pens, and chocolates

are the product types most frequently The higher use of CBD products among women
purchased by CBD purchasing is notable because men consume high-THC
cannabis consumers products at nearly twice the rate of women. This
G EN D ER O F C A N N A B I S CO N S U M ER S W H O P U R C H A S ED A C B D - O N LY P R O D U C T
I N T H E PA S T 6 M O N T H S
43%
57%
Female Male

G EN D ER & AG E D I S T R I B U T I O N
OF CBD USERS A MONG CURRENT C ANNABIS CONSUMERS
65+ 4% 5%
55-64 11% 13%
45-54 16% 15%
35-44 24% 26%
25-34 30% 34%
18-24 15% 7%
0% 10% 20% 30% 40% 50% 60% 70%
Female Male
E X P EN D I T U R E S O N C B D P R O D U C T S B Y C A N N A B I S CO N S U M ER S
Q : A P P R O X I M AT E LY H O W M U C H H AV E YO U S P E N T M O N T H LY O N C B D P R O D U C T S I N T H E PA S T S I X M O N T H S ?
30%
26%
17%
15%
8%
4%
Under $20 $20-$50 $51-$100 $101-$200 $201-$300 $400+

reflects the higher interest we have observed Similarly, the cannabis consumers who report
among women in the wellness benefits of cannabis purchasing a CBD-only product in the last 6
product without the strong mind-altering effect. It months are higher frequency cannabis users
is for this reason that demand for low-dose THC when compared to all cannabis consumers.
products are much more popular with women Nearly half of CBD purchasers (49%) report
than men. that they use cannabis products at least daily
compared to all cannabis users (36% of which
Among cannabis consumers who also purchase consume cannabis daily).
CBD products, nearly half (45%) reported
spending less than $50 in the last 6 months on CBD purchasers also perceive cannabis use to
CBD-only products. be an important part of their identity in greater
percentages than do all cannabis consumers,
Purchasers of CBD-only products are more likely 41% to 28%.
to be the heaviest spenders of high-THC cannabis
products. Roughly one in five CBD purchasers Consumers of CBD products were asked about
spend in excess of $201 per month on high-THC what types of CBD-only products they pur-
cannabis products. chased in the previous six months. Edibles (foods
M O N T H LY C A N N A B I S E X P EN D I T U R E S B Y CO N S U M ER S
W H O P U R C H A S E D A C B D P R O D U C T C O M PA R E D TO A L L C A N N A B I S C O N S U M E R S
Q : O N AV E R A G E , A P P R O X I M AT E LY H O W M U C H D O YO U S P E N D P E R M O N T H O N A L L C A N N A B I S P R O D U C T S ?
26%
24%
23%
20%
18%
17%
16% 16%
11%
10%
5%
3%
Under $20 $20-$50 $51-$100 $101-$200 $201-$400 $400+
Consumers Who Purchased CBD All Cannabis Consumers

C A N N A B I S CO N S U M P T I O N B Y T H O S E CO N S U M ER S
49%
36%
30%
25%
23%
15%
12% 11%
At Least Daily Once to a Few Times a Week A Few Times a Month A Few Times a Year
C A N N A B I S U S E A S A N I M P O R TA N T PA R T O F I D EN T I T Y F O R CO N S U M ER S
45%
41%
35%
28% 27%
24%
Agree Neither Agree or Disagree Disagree

D I S T R I B U T I O N O F C B D P R O D U C T S P U R C H A S ED
Gummies / Sweets 34%
Vape Pen 27%
Chocolate 23%
Tinctures 18%
Skin Lotion 15%
Coffee 12%
Water 11% 60%

Pills / Capsules 11%
Edibles
food/beverages
Beer 10%
Soda 10%
Wine 9% 47%
Fruit Juices 9% Other
Injestibles
Spirits 8% vape pens, pills
Sports Drinks 7%
20%
Pet Oils 7%
Bath Bomb 6%
Topicals
Pet Food 6% lotions, bath
bombs, cosmeics
Makeup / Cosmetics 5%
Note: Will not sum to 100% as respondents can select more than one
and beverages) were the most common product sumers who purchased a CBD product in the last
types purchased (60%). Gummies and sweets 6 months are likely to purchase and CBD product
(34%) were the most frequently purchased types again in the next 6 months.
of CBD food products, followed by chocolates
(23%). Other popular products include vape pens Given how young the CBD market is, it will be
(27%) and tinctures (18%). important to track whether the high repeat pur-
chase rates are tied to specific brands or products
There appears to be a relatively high level of con- (indicating that consumer preferences have settled
sumer retention among cannabis users who also and brand loyalty is growing), or whether consum-
purchased CBD products. Notably, 85% of con- ers are still in the exploration and experimentation

CO M PA R AT I V E L I K EL I H O O D O F P U R C H A S I N G
A C B D - O N LY P R O D U C T I N T H E N E X T 6 M O N T H S
Q : H O W L I K E LY A R E YO U TO P U R C H A S E A C B D P R O D U C T I N T H E N E X T S I X M O N T H S ?
85%
51%
24% 24%
10%
4%
Likely Neither Likely or Unlikely Unlikely
Consumers Who Have Purchased CBD Products Consumers Who Have Not Purchased CBD Products
phase where they are willing to continue trying

different products until they find the right fit.
The overall lack of
As federal and state governments have begun to
standards in decouple regulations governing CBD from those
manufacturing and testing governing psychoactive high-THC cannabis, the
appearance of CBD products in conventional
[of CBD products] mean retail outlets has quickly expanded consumer
that quality will vary access for all – not just consumers of cannabis
in legal markets. However the expansion has also
significantly for the brought unscrupulous actors selling low quality
foreseeable future, and CBD products, products which sometimes have
no CBD in them at all, hoping to cash in on the
could potentially impact the popularity craze. The overall lack of standards in
sector’s growth." manufacturing and testing mean that quality will
vary significantly for the foreseeable future, and
could potentially impact the sector’s growth.

TO P CO N D I T I O N S T R E AT ED W I T H C B D O I L
B Y VA R I AT I O N S O F T H C : C B D R AT I O
17%
14%
14%
14%
12%
12%
12%
11%
11%
11%
10%
10%
10%
10%
10%
9%
9%
8%
8%
7%
7%
7%
6%
5%
3%
3%
1%
1%
1%
1%
Joint Pain Muscle Pain Inflammation Anxiety Nerve Pain Insomnia
1:1 1:12 1:20 1:25 CBD Only

% of user sessions tracked using each type of THC:CBD Oil Ratio
Source: Strainprint TechnologiesTM
According to Data Collected by Strainprint Tech- it will be critical that CBD companies understand
nologiesTM, the majority of medical cannabis the differences in attitudes, perceptions and use
users on their platform use CBD oils for pain, behaviors between experienced users of CBD
with results varied across different CBD:THC and higher-THC cannabis and new CBD-only
oil ratio profiles. Interestingly, 10% of all sessions consumers in order to ensure brands are targeting
across Strainprint app users recorded using a 1:1 the right audiences with appropriate messaging.
THC:CBD ratio to treat insomnia.
Additionally, while THC and CBD have been the
Cannabis consumers have been the earliest focus on most cannabis-related research, the
adopters of CBD products given their existing growing investment in research into the effects of
affinity for cannabis and their high level of comfort other cannabinoids will create new opportunities
with its effect and safety profile. However, as for compounds like CBG and CBN.
interest in CBD surges among the general public,

Evolution of Products and P R O D U C T C AT EG O R Y T R E N D S

I N R E TA I L S A L E S
Consumption Preferences
Flower has consistently maintained its position
It has been five years since the legalization of the among users as the preferred product form over
first adult-use states, giving the first real lon- the last four years across both legal medical and
gitudinal insights into the evolution of cannabis adult-use cannabis markets in the U.S, accounting
consumer preferences in mature legal environ- for at least 50% of annual revenue share across all
ment that supports growing product innovation. product forms every year since 2015.
U. S . C A N N A B I S R E TA I L S A L E S S H A R E B Y P R O D U C T C AT EG O R Y
J A N 201 5 - A U G 201 9
Share % Change 2015-2019
-30%
Flower
+134% -12% -33%
Concentrates Edibles Other
100%
7% 8% 7% 6% 5%
90% 9%
10% 12% 12%
14%
80%
70% 17%
PERCENTAGE OF TOTAL SALES
18%
60% 22%
50% 34%
41%
40%
30%
20%
10%
65% 61% 59% 48% 45%
0%
2015 2016 2017 2018 2019
Flower Concentrates Edibles Other
Data shown for 2019 is for sales in January through August only.
*Sales of pre-rolls are included in “Flower” category.
**Sales of topicals, tinctures, and pills are included in “Other” category.
Source: New Frontier Data analysis of data from MJ Freeway and iHeartJane

Flower remains the largest revenue-producing have continued to see the volume of retail flower
product category (45% of sales YTD), but the sold increase year over year. Rather, the decline
share of flower sales revenue has been declining in flower’s share of the market is because the
annually. Though sales of flower accounted for demand for other products has grown far more
65% of all retail revenue in 2015, that share has quickly by comparison; flower is a well-established
declined to 45% for the first 8 months of 2019. product class, and thus more likely to experience
incremental growth.
While the decline in the market share of flower
is striking, it is important to understand that this Meanwhile, demand for concentrates has been on
decline in share is not caused by falling demand the rise, with the share of annual concentrate rev-
for flower. Indeed, markets like Colorado – the enues doubling in the last four years— from 17% in
most mature adult-use market in the country – 2015, to 34% in 2018. For the first 8 months of
U. S . L EG A L C A N N A B I S R E V EN U E S B Y P R O D U C T C AT EG O R Y
$15
$13.61
$12
$10.34
$9
$7.93
$6.14
$6.46
$6 $4.96
$4.84
$USD BILLIONS
$4.70
$3 $3.94
$3.14 $3.54 $5.55
$1.14 $1.76
$0.84 $1.26 $1.25
$0.88 $0.94
$0.50
$0 $0.36 $0.51 $0.53 $0.59 $0.67
2015 2016 2017 2018 2019
Flower Concentrates Edibles Other
*Sales of pre-rolls are included in “Flower” category.

**Sales of topicals, tinctures, and pills are included in “Other” category.
Source: New Frontier Data analysis of data from MJ Freeway and iHeartJane

2019 – concentrates accounted for 41% of all legal Massachusetts: Approaching 1 Year
cannabis revenues. This shift reflects the impact of Legal Adult-Use Cannabis Sales
of legal market access of consumer preferences,
with many consumers embracing the diversity
of product forms that have become commonly M A S S ACH U S E T T S BY T H E N UM B ER S
available. This evolution of product preferences
has been increasingly evident in the most mature 20 1 9 YE AR MEDIC AL Y E A R A D U LT-U S E
P O P U L AT I O N USE LEG ALIZED LEG ALIZED
markets of Colorado, Oregon, Washington, and
California, with similar trends beginning to play 6,941,571 2012 2016
out in the relatively newer markets allowing the
TOTA L N U M B E R O F PA S T Y E A R PA S T M O N T H
sale of concentrates and edibles (such as Arizona C A NN A B IS CONSUMERS U S A G E R AT E U S A G E R AT E
and Illinois). past year users, 2019 2019 2019
1,261,091 23% 16%

The sales trend reflects the behavioral shifts seen
in our consumer research, with a growing number REGIS TERED PAT I E N T LEG AL M ARKE T
of consumers complementing flower consumption PAT I E N T S R AT E FOREC A S T
with the use of concentrates and vapes (or other
product forms). This has led to dramatic growth 59,180 0.9% 38.4%
in demand for non-flower products, and for con-
centrates and vapes in particular, even as demand
for flower has grown more incrementally. It has been ten months since the state of Massa-
chusetts began sales of legal adult-use cannabis.
The shift will continue its momentum as more After an initial bumpy start to the program fraught
states activate fully legal markets, and more con- with delays, bad publicity over program diver-
sumers transition their cannabis purchases from sity initiative, and insufficient supply to meet
unregulated markets into legal ones. the strong demand from customers in the initial
months, sales are well underway, with new retail
Total legal revenue share from concentrates is locations opening all over the state as the Canna-
projected to continue to grow as newly legal state bis Control Commission has continued to approve
markets launch, and consumers become familiar new dispensaries on a rolling basis.
with the newer, higher-price-point concentrate
products. It is worth noting that, based on the Through July 2019, Massachusetts has sold $239
2018 Cannabis Consumer Survey, demand for million of cannabis since adult-use sales began
concentrates is rising in both legal and non-le- in November 2019, with monthly sales growing
gal markets. That suggests that as more states at a rate of 14%CAGR over the last 3 months.
legalize, they will already feature larger consumer Currently, the state is selling about $1.4 million
bases of non-flower product than were seen in of cannabis per day, with total annual legal sales
markets like Colorado and Washington when they of cannabis (medical and adult-use combined)
first launched. projected to exceed $600 million in 2019.

M O N T H LY S A L E S O F A D U LT-U S E C A N N A B I S I N M A S S AC H U S E T T S
$50
$44.9
$41.0
$40
$36.5
$30.4
$30
$23.9
18%
$20 $17.7
$15.2
$USD MILLIONS
$11.7
$10
$4.2
$0
Nov 2018 Dec 2018 Jan 2019 Feb 2019 Mar 2019 Apr 2019 May 2019 Jun 2019 Jul 2019
Source: Massachusetts Cannabis Control Commission
M A S S AC H U S E T T S L EG A L C A N N A B I S S A L E S
201 9 - 2025 E S T
$2,000
$1,822
$1,717
$1,504
$1,500
$1,267
$1,051
$1,000
$848
IN $USD MILLIONS
$623
MARKET SIZE
$500
$404 $616 $824 $1,044 $1,286 $1,503 $1,613
$220 $232 $227 $223 $218 $214 $210

$0
2019 2020 2021 2022 2023 2024 2025
Legal Adult-Use Market Legal Medical Market

Demand is expected to continue to grow at a rapid product type (smoking is the preferred method
pace as more retail dispensary locations open for of consumption in the age of prohibition), with
business, with an uptick in both consumer partic- preferences for higher value-add products like
ipation and product revenues expected when the concentrates and edibles taking longer to develop
state finalizes regulations for delivery businesses as they were introduced. In 2015, share of total
and social consumption. By 2025, annual sales of legal cannabis revenues in the U.S. attributable
legal cannabis in Massachusetts are projected to to concentrates and extracts was just 17%, only
reach $1.8 billion. climbing above 30% in the last year.
PRODUC T PREFERENCES
Share of sales revenue concentrates and vapes
The product-sales mix profile in Massachusetts is in the first 10 months of sales in Massachusetts,
largely in-line with the national trends in product however, is already at 31%. Additionally, the state
revenue share across legal markets – a reflection has seen strong demand for edibles, with the share
of the evolution in product preferences occurring of total program revenue attributable to edibles
nationally in the wake of states legalization. sales at 14%, above the national average of 9%.
The first states to operate legal cannabis markets To fuel the growing demand, Massachusetts has
in 2014 and 2015 saw flower as the dominant approved 77 final cannabis licenses, including 24
M A S S AC H U S E T T S P R O D U C T S A L E S
$50
$40
$6
$6
$30 $5
$5
$14
$4 $13
$20 $12
$USD MILLIONS
$2 $11
$2 $8
$2 $6
$10 $5
$4
$1
$2 $6 $8 $9 $12 $14 $17 $19 $21
$0 $2
Flower Concentrates Edibles Infused (non-edible) Pre-Rolls

M A S S AC H U S E T T S P R O D U C T T Y P E R E V EN U E S H A R E
100% 1% 1% 2%
4% 6% 4% 4% 5% 6%
16% 13% 10% 12% 15%

16% 15% 14% 14%
80%
60%
34% 33% 34% 32% 31% 31%
36% 35%
% OF TOTAL REVENUES
38%
40%
20%
45% 47% 50% 50% 50% 47% 49% 49% 50%

0%
Flower Concentrates Edibles Infused (non-edible)
M A S S AC H U S E T T S L I C EN S I N G P R O F I L E
80
70
60
50
40
42
LICENSE COUNT
30 29
2
3 25
2
20
10
2 1 2 1
27 24 21 1 2
0
Marijuana Marijuana Marijuana Marijuana Independent Marijuana Transporter Third Party
Retailer Cultivator Product Microbusiness Testing with Other Marijuana
Manufacturer Laboratory Existing ME License Transporter
Final License Provisional Consideration Provisional License

L EG A L I Z AT I O N F U E L I N G
cultivator and 27 retail licenses, and given provi-
EC O N O M I C G R O W T H
sional licenses and consideration to an additional
108 operators. There are just under 3,000 people currently
employed in Massachusetts’ cannabis market.
In Massachusetts cultivators are currently growing This is only 7.5% of the 39,5000 cannabis jobs
approximately 2,800 strains of cannabis and har- in the state of Washington, a mature cannabis
vesting about 760 plants per day. Expect this to market with roughly the same number of cannabis
increase significantly in the future as larger oper- consumers and total population. This underscores
ators enter the market. An analysis of cultivation the strong growth that lies ahead for the state’s
licensing data shows that the total licensed canopy fledgling industry. New Frontier Data is currently
in the state is set to expand almost three times tracking 440 open job positions in Massachu-
from 555,000 ft2 to 1,455,000 ft2 when pro- setts, or about one job opening for every 8,200
visionally approved licenses are converted to final people living in the state.
licenses. This compares to a total licensed canopy
that exceeds 20 million ft2, and 15 million ft2, in Interestingly, Massachusetts is currently one of the
Oregon and Washington, respectively. most competitive states for cannabis job seekers of
any of the country’s major markets (behind Illinois
and Florida), however this is largely due to the imma-
turity of the market, and as the number of operating
retail licenses grows, so will the job market.
M A S S AC H U S E T T S C U LT I VAT I O N L I C EN S E CO U N T S
30
24
25
20
15
LICENSE COUNT
10
0
Oct 2018 Nov 2018 Dec 2018 Jan 2019 Feb 2019 Mar 2019 Apr 2019 May 2019 Jun 2019 Jul 2019
New Cultivation Licenses Total Cultivation Licenses

M A S S AC H U S E T T S A P P R OV ED C U LT I VAT I O N T I ER CO U N T S
15
12
6
LICENSE COUNT
2 10
3 6 3 1
3
0 1 0 3
4 4 3 3 3 3 1 1 1 1
0
Tier 01: Tier 02: Tier 03: Tier 04: Tier 05: Tier 06: Tier 07: Tier 08: Tier 09: Tier 11:
up to 5,000 5,001 to 10,001 to 20,001 to 30,001 to 40,001 to 50,0001 to 60,001 to 70,001 to 90,001 to
sq. ft. 10,000 sq. ft. 20,000 sq. ft 30,000 sq. ft 40,000 sq. ft 50,000 sq. ft 60,000 sq. ft 70,000 sq. ft 80,000 sq. ft 100,000 sq. ft
Current Final Licenses Provisionally Approved Licenses
P O P U L AT I O N P ER J O B O P EN I N G I N L EG A L C A N N A B I S M A R K E T S
IN THOUS ANDS OF PEOPLE
13.8
12.5
8.2
5.7
4.4 4.3
3.3
2.9
1.6
Illinois Florida Massachusetts Arizona Washington California Oregon Colorado Nevada

The Nexus of Cannabis S O C I A L U S E S PAC E S
and Alcohol A S A C ATA LY S T
The rise of social use – and expanse of public

The alcohol industry is poised to face significant spaces where cannabis use is permitted– will
disruption due to the expansion of legal cannabis represent another consequential step toward
access. There will be challenges on two fronts: increasing social acceptance of cannabis. The
first cannabis café is set to open in West Holly-
1) Growing awareness of negative wood, California this year, breaking ground as the
health effects of drinking
Public acceptance of the growing scientific evi-
dence of the health dangers of drinking has led
to increased community and individual efforts to Alcohol use is a leading risk
reduce alcohol use, which may begin a durable factor for disease burden
long-term trend. worldwide, accounting for nearly 10% of
2) Cultural Changes global deaths among populations aged
15–49 years, and poses dire ramifications
Increasingly, young people living in the regions of
for future population health in the
the country that hold the most progressive views
on cannabis are coming of age in an environment
absence of policy action today. Our
where cannabis is viewed on par with, if not as results show that the safest level of
safer than, alcohol, and young consumers in those drinking is none. This level is in conflict
markets where cannabis is as legal and available as with most health guidelines, which
alcohol may chose cannabis as a partial or com- espouse health benefits associated with
plete substitute. If consumers never develop a consuming up to two drinks per day.
palate for alcohol in their formative adult years, it
Alcohol use contributes to health loss
is unlikely that they would become regular drinkers
from many causes and exacts its toll
later in life. They may still drink on occasion, but
not with the frequency or intensity seen as part of
across the lifespan, particularly among
the current drinking culture that is so entrenched men. Policies that focus on reducing
in young adulthood across the country, and most population-level consumption will be
certainly not at the same spending rates that most effective in reducing the health
alcohol companies have seen in the past. As such, loss from alcohol use.”
the total lifetime value lost by the alcohol industry
– Alcohol use and burden for 195 countries and territories,
for each young consumer who never develops a 1990–2016: a systematic analysis for the Global Burden of
taste for alcohol will be considerable. Disease Study 2016, The Lancet, August 23, 2018

first social-use space in the most significant legal Cannabis Consumers Show
cannabis state in the country. In the coming years, a Complex, Evolving Relationship
the expansion of social-use spaces will further to Alcohol
segregate cannabis consumers from alcohol as
most jurisdictions only permit consumption of New Frontier Data’s 2018 Consumer Survey
one or the other on the premises. Subsequently, suggests that some cannibalization of alcohol is
social-use spaces will provide adults with alter- likely already occurring, spurred by the expansion
native venues to bars and clubs, in places where of legal cannabis and the dramatic changes in
alcohol is not sold. public attitudes.
C A N N A B I S & A LCO H O L V I E W S B Y C A N N A B I S U S ER S
Cannabis is safer than alcohol. 2%2% 17% 19% 54%
I prefer to consume cannabis rather than alcohol. 9% 8% 16% 16% 49%

I am not allowed (or able) to consume
cannabis in places I consume alcohol. 14% 6% 20% 17% 33%
Mixing alcohol and cannabis increases the effect of both. 12% 7% 20% 27% 21%
Mixing alcohol and cannabis can be dangerous. 13% 10% 21% 24% 22%
I am likely to replace some of my

12% 8% 26% 18% 27%
drinking with cannabis in the future.
I would prefer to stop drinking alcohol entirely. 14% 15% 22% 17% 27%
I have replaced some of my drinking with cannabis use. 21% 10% 21% 18% 24%
I like the feeling when I mix alcohol and cannabis. 20% 11% 21% 20% 17%
I have had a bad experience when
I have mixed alcohol and cannabis. 34% 11% 17% 14% 14%
I feel judged for consuming cannabis 30% 14% 23% 14% 11%
around people who are drinking.
I don't like to consume cannabis
around people who are drinking. 26% 15% 27% 13% 11%
Consuming cannabis with friends is not as
much fun as drinking alcohol with friends. 29% 15% 26% 13% 10%
I prefer the feeling of mixing alcohol and 29% 14% 24% 12% 10%
cannabis over the feeling of either one alone.
50% 25% 0% 25% 50%
Strongly Disagree Slightly Neither Agree Slightly Strongly

Disagree nor Disagree Agree Agree
Note: The questions do not sum to 100%, as respondetns had the option to answer "Don't Know".
It can be imploied that any remainder falls into the "Don't Know" category.

S EL F-R EP O R T ED C H A N G E S I N A LCO H O L CO N S U M P T I O N
A M O N G C A N N A B I S C O N S U M E R S O V E R T H E L A S T T W O Y E A R S B Y H O M E S TAT E M A R K E T T Y P E
38%
37% 37%
27%
25%
23%
20% 20% 20%
19% 19%
16%
Alcohol use decreased Alcohol use stayed the same Alcohol use increased Do not drink
Adult-Use Medical Illicit

C A N N I B A L I Z AT I O N
Polled U.S. cannabis consumers living in states with
O F A LC O H O L S A L E S
the most progressive views on cannabis expressed
strong preferences for cannabis over alcohol, and The map on the following page shows New Fron-
indicated that they intended to displace some of tier Data’s estimates in the national spending shift
their drinking with cannabis in the future. to cannabis from the alcohol markets. Specifically,
it illustrates the year-over-year monetary decline
Surveyed cannabis consumers in legal markets in alcohol sales throughout the 50 U.S. states
indicated decreasing levels of alcohol consumption due to cannabis.
over the last two years.
Such metrics are crucial to understanding how
shifts in consumer spending affect a given region,
and help to qualify the market opportunity for
demand of cannabis products. Most importantly,
such critical information affords mature finan-
cial stakeholders (such as traders following the
industries) to project trading fluctuation and make
investment decisions over time.

In the October 2018 report Helping Settle The reasons for this significant impact in medical
the Marijuana and Alcohol Debate: Evidence from cannabis market remains poorly understood.
Scanner Data, researchers from the University However, New Frontier Data’s ongoing research
of Connecticut and Georgia State University is examining the rates of alcohol cannibalization
show that the degree of cannibalization could be across state markets, and the evolution of alcohol
substantial. “We find that marijuana and alcohol displacement among cannabis consumers as legal
are strong substitutes. Counties located in MML markets evolve.
(Medical Marijuana Law) states reduced monthly
alcohol sales by 15%, which is a consistent finding
across several empirical specifications.”
N AT I O N A L S P EN D I N G S H I F T S TO C A N N A B I S
Percentage of alcohol sales declines as a result of cannabis cannibalization
0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0 6.5
Source: New Frontier Data Consumer Insight: The Nexus of Cannabis and Alcohol

The alcohol industry is well aware of the risk that

legalized cannabis poses to their revenue potential,
despite publicly downplaying their concerns. The The alcohol industry
single largest investment in the cannabis industry is well aware of the
to date - $4 billion in 2018 – was by one of the
world’s leading alcohol companies, Constellation risk that legalized cannabis
Brands, into Canada’s largest LP, Canopy Growth poses to their revenue
Corporation. Central to the investment was the
development of fast-acting, nonalcoholic, can- potential, despite publicly
nabis- infused beverages. Constellation Brands downplaying their concerns.
is just one of several alcohol companies having
already invested in the cannabis industry.
C A N N A B I S I N D U S T R Y I N V E S TM EN T S
$15 TOP 2018

$13.80 INVESTMENTS
Constellation Brands’
Investment in
$12
42% Canopy Growth
from two Corporation
companies
$4 Billion
$9
$7.38
Altria’s Investment
in Cronos
$6
$1.8 Billion
$3.49
$USD BILLIONS
$3
$1.29
$0.91
$0
2015 2016 2017 2018 2019 YTD*
Note: The second-largest investment was by Altria, one of the world’s largest tobacco companies.
*2019 YTD is through August 9th, 2019.
Sources: Viridian Capital Advisors, New Frontier Data

KEY INDUSTRY TRENDS: INVESTMENT TRENDS
INVESTMENT The sectors focusing the most attention on

TRENDS cannabis include banking and finance, pharma-
ceuticals, agriculture, alcohol, and professional
The explosive growth of the legal cannabis services. Since some of these sectors are also
industry has drawn increasing attention from highly regulated, there has been hesitancy to get
investors and companies in a range of industries involved in the industry due to concerns about
that are interested in capitalizing on opportu- the plant’s continued illegality under federal law.
nities in the sector. The growing interest from However, over the past decade, as legal state
corporations and individuals outside the indus- markets have begun to mature and momentum
try will be vitally important in increasing the builds for national cannabis reform, investors
legitimacy and professionalism of the industry, have shown increasing willingness to take on the
funding sector-wide innovation, and increasing risks in order to capture a first-mover advantage
corporate and industry efficiency to reflect in an high-opportunity industry that is still highly
mainstream businesses practices. fragmented with relatively few large players.
N U M B ER O F D EP O S I TO R Y I N S T I T U T I O N S W O R K I N G
W I T H C A N N A B I S B U S I N E S S I N T H E U. S . (O C T 2016 - M A R C H 2019)
650
633 Banks Credit
Unions
600 493 140
550
Total Number of
Suspicious Activity
500 Reports (SARs) Filed
450
81,725
400 Number of Cannabis
Business Accounts
318 Terminated
19,368
350
300
Oct 2016 Mar 2017 Oct 2017 Mar 2018 Oct 2018 Mar 2019

Banking introduces security risks as companies are forced

to stockpile cash as they find alternative financial
Between 2019 and 2025, the states that have services providers.
already implemented legal medical and adult-use
cannabis markets are projected to generate a col- Emergence of MSOs and Their
lective $156 billion in retail sales. Given the scope Impact on U.S. Domestic Market
of banking opportunities within the burgeoning
cannabis industry, banking and financial service The fragmented state-specific nature of the legal
firms have much to gain from providing their cannabis industry has historically been domi-
services. However, most major national banks nated by small local players, but larger, publicly
have remained wary for fear of being prosecuted traded companies with multistate operations
for serving the federally illegal industry. With a are becoming an increasingly dominant force.
lack of big banks willing to take on those risks, Rapid consolidation and expansion among can-
smaller state-based banks and credit unions have nabis companies has been growing, with a slew of
stepped in with increasingly creative workarounds reverse takeovers occurring in 2018 that allowed
to provide capital and solve some of the unique U.S. companies to go public in Canada, where
banking problems that exist within the industry. cannabis is federally legal.
Larger players in the industry have easier access
to financing because they have more collateral New Frontier Data expects to see an increase
(such as real estate) to support it, but the regu- in the number and size of mergers and acquisi-
latory nuances within each state market can raise tions (M&A) in the cannabis space as the industry
obstacles to securing loans for smaller firms. expands. Acquisition will be a key strategy for
firms seeking to strengthen market position
While the number of depository institutions or increase market share in this early stage of
serving the industry has nearly doubled since state-legalization.
Oct 2016, to 633, reflecting the quickly scaling
industry, stringent reporting requirements and Over the first 8 months of 2019, nearly 400
frequent account terminations disrupt opera- capital raises and just over 240 M&A deals have
tional efficiency. In less than three years, banks taken place in the cannabis sector. Capital raises
filed nearly 82,000 Suspicious Activity Reports YTD have totaled nearly $10 billion, with infused
– a requirement when conducting transactions products and extracts becoming a strong focus
for cannabis businesses – and terminated nearly for investment due to the high growth in popu-
20,000 accounts. larity and revenue share in legal markets where
concentrates and extracts are approved product
In many instances, banks terminate accounts out forms. Nearly half of all M&A transactions in
of an abundance of caution to minimize the risk of cannabis (public and private) involved companies
running afoul of federal guidelines. However, in a in cultivation and retail. That compares with 58
cash intensive market, the loss of a bank account out of 206 transactions in the corresponding
is not only a significant operational disruption, it period in 2018.

A N N UA L N U M B ER O F D E A L S
116
2017
297
244
2018
443
243
2019 YTD*
390
0 100 200 300 400 500
M&A Capital Raises

*YTD is through 8/30/19
Source: Viridian Capital Advisors
C A N N A B I S I N D U S T R Y I N V E S TM EN T C A P I TA L R A I S ED
201 5- 201 9 Y T D
$15
$13.80
$12
$9.65
$9
$6
$USD BILLIONS
$3.49
$3
$1.29
$0.91
$0
2015 2016 2017 2018 2019 YTD*
*YTD is through 8/30/19


C A N N A B I S S EC TO R CO N S O L I DAT I O N
201 8-201 9 H I G H L I G H T S
Transaction Value
Deal Buyer Target Company Deal Type ($ USD unless listed
Date otherwise as CAD)
CanniMed CAD $1.23 billion

Jan 2018 Aurora Cannabis Inc. Acquisition
Therapeutics cash-and-stock deal
Mar 2018 Aphria Inc. Nuuvera Inc. Acquisition $425 million
Mar 2018 Aleafia Health Canabo Medical Inc. Merger approx. $30 million
May 2018 Aurora Cannabis Inc. MedReleaf Corp. Acquisition CAD $3.2 billion
Constellation Brands
Aug 2018 Canopy Growth Corp. 38% ownership of CGC CAD $5 billion
Inc.
Sep 2018 Aurora Cannabis Inc. ICC Labs Inc. Acquisition CAD $290 million
Scythian Biosciences Sale of Scythian's Latin American
Sep 2018 Aphria Inc. approx. $300 million
Corp. & Caribbean Assets
$682 million all-stock
Oct 2018 MedMen PharmaCann Acquisition transaction
Merger: Aleafia controls 59%
Dec 2018 Aleafia Health Emblem CAD $173 million
Emblem controls rem. 41%
Nov 2018 Canopy Growth Corp. Ebbu Inc. Acquisition CAD $425 million
Dec 2018 Altria Group Cronos Group 45% ownership of CRON $1.8 billion
Jan 2019 Acreage Holdings Nature's Way Nursery Acquisition $67 Million
Feb 2019 iAnthus Capital Holdings MPX Bioceuticals Acquisition $625 Million
Feb 2019 MedMen Level Up Acquisition $33 Million
Feb 2019 GNCC Capital BioCann Pharma Acquisition $120 Million
Mar 2019 Tilray Manitoba Harvest Acquisition $419 Million

Whistler Medical
Mar 2019 Aurora Cannabis Acquisition CAD $175 Million
Marijuana Corp.
Apr 2019 Curaleaf Eureka Holdings Acquisition $30.5 Million
Apr 2019 Acreage Holdings Form Factory Acquisition $160 Million
May 2019 Canopy Growth Corp C3 Group Acquisition $253 Million
Jun 2019 TerrAscend The Apothecarium Acquisition $118 Million

Vegas Valley Growers
Jun 2019 Ionic Brands Acquisition $8.87 Million
North
Jul 2019 Jushi Holdings Franklin Bioscience Acquisition $63 Million
Aug 2019 Green Growth Brands Oaks Greenhouse Acquisition $54.65 Million
Aug 2019 Cannex Capital Holdings 4Front Holdings Merger >$500 Million

Large companies from outside the cannabis space Federal Regulators Slow the Sectors
are increasingly using M&A activity to gain a Largest M&A Deals
foothold in the industry. For example, Scotts Mir-
acle-Gro, acquisition of General Hydroponic, Inc., At least six major M&A deals between MSO’s
in 2015 for approximately $130 million, was just one are currently in federal review for antitrust con-
of the early large entrants, soon to be followed a cerns. The affected deals are some of the largest
flurry of major deals, including Constellation Brands in the U.S. cannabis industry’s history, includ-
(Canopy Growth Corporation), Altria (Cronos), ing Harvest Health’s $850 million acquisition
Molson (Hexo) and Anheiser Busch (Tilray). of Verano Holdings, Cresco Labs $823 million
acquisition of Origin House, and MedMen’s nearly
These major brands are using these deals to $650 million of PharmacCann.
build expertise and capture share in the market.
However, their massive investments are also The rise in federal scrutiny of these deals is driven
transforming the financial landscape, giving their by the rapid pace of consolidation in the indus-
partners and acquirers the liquidity needed to try among the sector’s largest actors. However,
aggressively fund new growth. the Department of Justice’s tacit approval of the
MedMen deal – the first to clear federal review
The pace of market consolidation will increase in – has allayed concerns that the agency would
the coming years, allowing some firms to increase adopt an aggressive stance against the deal, and
market share and position, acquire strategic assets, raised hopes that the other deals in process will
or expand into new markets. Differences between be similarly approved.
state regulatory structures, as well as differences
between state and federal policies, will direct M&A
activity, although valuation of cannabis compa- M& A D E A L S U N D ER
F ED ER A L R E V I E W
nies will remain tricky due to the immaturity of
the industry and lack of quality information. Con-
sequently, some acquisitions will remain highly Acquirer Target
speculative in nature, increasing risk but also giving
acquirers more leverage in pricing negotiations. Cresco Labs Inc. Origin House
Despite difficulties in developing accurate company

MedMen Enterprises Inc. PharmaCann
valuations, the next few years are likely to be a
golden age of M&A in the industry. Harvest Health & Recreation Inc. Verano Holdings
Curaleaf Holdings Inc. Select
Curaleaf Holdings Inc. Grassroots
Green Growth Brands Inc. Moxie
Source: Bloomberg

TO P 10 C A N A D I A N CO M PA N I E S B Y M A R K E T C A P
Company Ticker Market Cap (9/12/19)
Canopy Growth Corporation WEED $9,262,053,290
Aurora Cannabis Inc. ACB $6,039,174,346
Cronos Group Inc. CRON $3,848,044,568
Tilray Inc. TLRY $2,433,262,011
Aphria Inc. APHA $1,699,151,756
HEXO Corp. HEXO $1,081,414,043
OrganiGram Holdings Inc. OGI $801,584,584
Village Farms International Inc. VFF $585,139,347
The Green Organic Dutchman TGOD $560,609,329
MediPharm Labs Corp. LABS $534,340,079
Source: CannabisMarketCap.io
TO P 10 U. S CO M PA N I E S B Y M A R K E T C A P
Company Ticker Market Cap (9/12/19)
The Scotts Miracle-Gro Company SMG $5,606,291,989
Curaleaf Holdings Inc. CURA $2,752,340,963
Arena Pharmaceuticals Inc. ARNA $2,636,249,321
Green Thumb Industries Inc. GTII $1,202,571,317
Cara Therapeutics Inc. CARA $1,079,211,525
Innovative Industrial Properties IIPR $1,005,279,927
Cresco Labs Inc. CL $942,315,386
Charlotte's Web Holdings Inc. CWEB $650,408,352
Acreage Holdings Inc. ACRG $550,435,104
Harvest Health & Recreation Inc. HARV $458,760,536
Source: CannabisMarketCap.io

M A R K E T C A P I TA L I Z AT I O N VA LU E S N A P S H OT S
IN $USD MILLIONS
Country
Company Ticker Sep 2017 Sep 2018 Sep 2019
Base
Canopy Growth Corp Canada WEED / CGC $1,241 $11,800 $9,262
Aurora Canada ACB $742 $5,835 $6,039
The Scotts Miracle-Gro Company U.S. SMG $5,505 $4,230 $5,606
GW Pharmaceuticals plc U.K. GWPH $2,749 $4,012 $4,491
Cronos Group Canada CRON $248 $2,124 $3,848
Curaleaf U.S. CURLF $0 $0 $2,752
Arena Pharmaceuticals U.S. ARNA $934 $1,976 $2,636
Tilray Canada TLRY $0 $7,255 $2,433
Aphria Canada APHA $681 $3,603 $1,699
Green Thumb Industries Inc. U.S. GTII $2 $2,827 $1,202
Total Sum Top 10 $12,100 $43,662 $39,968
YOY Growth YOY Growth 261% -8%
Source: CannabisMarketCap.io, Bloomberg
The DOJ’s intervention in these deals also high- Cannabis stocks have enjoyed a boon over the
lights the tensions caused by federal policy – in last few years amid growing corporate invest-
this case resulting in the Department of Justice ments, high enthusiasm among retail investors,
assessing anti-competitive behavior to protect sweeping political reform, and international
the public interest in an industry still classified as expansion of legalization.
illegal by the agency.
However, in 2019, as talk around federal legaliza-
TO P C O M PA N I E S I N T H E C A N N A B I S tion slowed, earnings estimates have been missed,
S PAC E B Y M A R K E T C A P I TA L I Z AT I O N and key markets like New York and New Jersey
The top 10 current largest cannabis companies failed to advance legalization measures, that
have a combined $42.8 billion in market capital- momentum has waned. This loss of momentum,
ization as of September 2019, a 2% decrease from combined with a litany of investment risks, has led
the previous year. Both market caps of both Tilray to a substantial sell off across the sector Of the
and Aphria are down over 50%. top 10 largest cannabis companies by market cap,
70% experienced a decline in their stock prices

G R O W T H I N M A R K E T C A P I T I L I Z AT I O N O F TO P C A N N A B I S CO M PA N I E S
A N N UA L S N A P S H OT S
$14,000
$11,800
$12,000 -8%
from
$9,262 previous year
$10,000
$7,255
$8,000 $6,039
$5,835
$5,606
$5,505
$6,000
$4,491
$4,230
$4,012
$3,848
$3,603
$USD MILLIONS
$4,000
$2,827
$2,749
$2,752
$2,636
$2,433
MARKET CAP
$2,124
$1,976
$1,699
$1,202
$1,241
$2,000
$934
$742
$681
$248
$2
$0
$0
$0
$0
WEED / CGC ACB SMG GWPH CRON CURLF ARNA TLRY APHA GTII
Sep 2017 Sep 2018 Sep 2019

Source: CannabisMarketCap.io, Bloomberg
since the beginning of 2019. Canopy Growth bright. Scotts Miracle-Gro shares have risen by
Corp, the largest of these producers, is down $1 74% YTD as demand for cultivation supplies is
billion in the 3 months through September 2019. spurned by the activation of major new markets,
including Michigan and Illinois. Curaleaf and Arena
Among the casualties from the recent sell off, Pharmaceuticals have likewise experienced sub-
Canopy Growth Corp’s CEO and Chairman stantial growth in 2019.
Bruce Linton, who claims he was ousted fol-
lowing disagreements with the board about the While stocks such as Canopy Growth and Tilray
company’s aggressive spending and steep oper- have slipped in 2019, they have been planting
ating losses. Around the same time Cowen, a Wall the seeds of longer-term success. Both Cana-
Street Cannabis Bull, cut its price targets for both dian cannabis producers have set their sights on
Cronos and Tilray. Europe’s substantial medical market opportunity.
Tilray recently signed an agreement to supply
While some investors are recalibrating their Germany with $3.3 million worth of medical can-
expectations, the future of cannabis remains nabis from its facility in Portugal. Canopy Growth

H I S TO R I C A L S TO C K P R I C E S
TO P 1 0 L A R G E S T C A N N A B I S C O M PA N I E S
200
150
100
50
Oct 2015 Jan 2016 Apr 2016 Jul 2016 Oct 2016 Jan 2017 Apr 2017 Jul 2017 Oct 2017 Jan 2018 Apr 2018 Jul 2018 Oct 2018 Jan 2019 Apr 2019 Jul 2019
CGC SMG ACB GWPH CRON CURLF ARNA TLRY APHA GTII
Source: Yahoo!Finance
has also identified Germany as a key market and Public market investors looking to avoid the vola-
expects sales from their Denmark facility by the tility and potential risk of OTC markets, now have
end of 2019. At the same time, political reform option to invest in cannabis indirectly through the
continues to tantalize current producers with the growing number of well-established non-cannabis
opportunity to access new markets. Despite the companies targeting the industry via acquisitions
lack of progress in 2019, New York, and New of ancillary products and services. Scotts Mira-
Jersey remain strong near-term prospects for cle-Gro, for example, has expressly made it a part
adult use legalization, Florida advocates are of its growth strategy, planning to invest $400
advancing an adult use ballot initiative for 2020, million in garden and hydroponic products used
and calls for medical legalization are growing from in cannabis cultivation.
Texas to Virginia.

KEY TAKEAWAYS depend heavily on the regulations, level of govern-
ment involvement, political climate, and market
demand in each country. Investors, experienced
consultants, and ancillary market suppliers face
fewer constraints in entering international markets,
Over the past year, the mainstreaming of but it is worth noting that that although the U.S.
cannabis in the U.S. has crossed a new threshold. may prohibit exports of cannabis products, plant
Nearly two-thirds of adults now support full legal- touching companies can leverage licensing
ization, state markets spanning the country have agreements, IP transfer, technical consulting, and
activated medical and adult use programs, and a non-cannabis consumer brand development as
majority of presidential candidates support sub- initial entry channels into international markets.
stantive federal policy reforms. Despite slow
progress in congress to advance banking and tax The Farm Bill catalyzed the CBD market,
reform, and the failure of adult use measures in with major players, including CVS and Walgreens
major states like New York and New Jersey, the rushing to get CBD products on their shelves.
industry has continued to see strong growth But Curaleaf’s letter from the FDA illustrates the
fueled by surging consumer demand. lingering uncertainty about the regulatory envi-
ronment and the exposure CBD companies face
Cannabis will take the national stage in the for being at the industry’s bleeding edge.
2020 election. Ending federal prohibition is
largely a settled issue among the 2020 demo- The industrial hemp market is growing, pri-
cratic presidential hopefuls, which increases the marily for CBD based applications, but as the
likelihood that the party will coalesce on the issue. technologies for other applications (such as bio-
How republicans will respond remains unclear at plastics and textiles) become more efficient and
this point, but with the narrow electoral margins cost effective, the non-CBD applications for
that will be required to win, conservatives may be hemp will see catalytic growth.
reluctant the make a hard rejection of easing can-
nabis prohibition given the surging levels of support The industry has raised record shattering
across demographics, and the large number of sums – nearly $30 billion of tracked investment
states which now permit medical use. deals since 2015, the vast majority of it ($23.4
billion) raised in the 20 months between Jan 2018
While few countries have advanced as far in and Aug 2019. Much of that capital has flown into
their debates as the United States, Uruguay, and Canadian companies, fueling aggressive growth
Canada, calls for expanding medical cannabis and expansion, and leading to nose bleeding
access are reverberating across the globe. As market caps. It remains to be seen if the LP’s will
popular support for legal cannabis grows and leads be able to drive revenue growth to commensurate
to adoption of new cannabis laws, cannabis inves- levels, which may lead some investors to look for
tors soon will have varied opportunities across alternate cannabis investment plays. With US
several countries. The types of opportunities will federal legalization momentum building, and

K E Y TA K E AWAY S
state-level markets seeing stable, sustained cannabis spaces where onsite consumption is per-
growth, we anticipate increased reverse capital mitted is a key milestone in the public emergence
flow as investors chase higher returns and stronger of the legal cannabis consumer. To date, there are
growth prospects in the U.S. in the coming years. very few places in legal markets where cannabis
can be publicly consumed, meaning most cannabis
States seeking to engage in interstate com- is consumed in private. As such, despite soaring
merce will present another case for reform of sales, cannabis consumers have largely been
federal laws. Oregon’s export bill underscores the hidden from public view.
paradox of the patchwork state approach to can-
nabis legalization. While it may be some time before Social use spaces have the potential to draw
the measure, or something similar, becomes law, it a broad base of cannabis consumers, ranging
does hint at the shift on production that could from solitary consumers seeking to connect with
follow federal legalization. Under the current model, the community, to those whose living arrange-
cannabis cannot cross state borders. But under a ments preclude them from consuming at home.
national model, production could be centered in Social use spaces will draw consumers out of the
the regions with optimal growing conditions and shadows and give aface to the broad diversity of
lowest production costs. A fully legal national cannabis consumers. They also present intriguing
market could give a strong advantage to areas of opportunities for the innovative use of space to
Northern California and Southern Oregon, which reflect the different ways in consumers might
have ideal conditions for outdoor and greenhouse experience cannabis. The much-discussed Los
cultivation as well as the country’s highest density Angeles-based Lowell Farms Cannabis Café,
of cannabis industry professionals. notable for its location in West Hollywood, is the
latest example of a cannabis brand going beyond
Consumer behavior is rapidly changing, product to curate the consumer’s entire experi-
driven by growing public acceptance, affirming ence. From food and art to music and wellness,
research into the medical and wellness uses of the integration of cannabis into public experi-
cannabis, and the expanding product environment ences will be the next major chapter the evolution
in legal markets. The changes in consumer pref- of America’s legal cannabis industry.
erences are having major impacts on the supply
chain, from the dramatic swing in demand from Understanding evolving attitudes, behav-
flower to extract-based products, to the increas- iors and preferences will be key to building
ingly nuanced ways in which consumers are effective consumer engagement strategies in an
integrating cannabis into their lives. It is therefore increasingly competitive market.
vital that the companies closely monitor and adapt
to the emerging and evolving consumer. Product innovation is transforming the con-
sumer experience. In particular, the development
Beyond the cannabis products consumed, of fast-acting formulations that can produce an
the place of cannabis in American society is fun- effect within 10-15 minutes of ingestion will be
damentally changing. The advent of public highly appealing to consumers who want the rapid

K E Y TA K E AWAY S
onset of flower or concentrate combustion, but effects from cannabis use, and with social
do not want to smoke, either due to health con- acceptance surging, some consumers may not
cerns or due the inability to mask the odor of understand their personal risk exposure. Similarly,
combusting flower. national data and data from the most mature legal
state market of Colorado show increases in
Fast acting infused beverages in particular,
will be a promising area of growth. cannabis use among pregnant women. While the
impact of cannabis use on the developing fetus is
○ Demand for dealcoholized cannabis- not well understood, expectant mothers should
infused beers has been slow, with
exert due caution until the science is definitive.
consumers citing taste profile and
cost as reasons for infrequent use
The advancement of legal cannabis globally
○ Low calorie beverages, such as seltzers, promises to be one of the most consequential
are among the fastest growing product social changes of our time, but America’s place in
categories in the general consumer the emerging cannabis economy remains uncer-
market, and given the intense consumer tain. While companies from Canada and Uruguay
interest, cannabis infused analogs of to Thailand and Australia invest heavily in building
those beverages will likely be very capacity to serve the emerging global market, U.S.
well received (assuming cost and companies remain restricted by federal law from
flavor profile are well calibrated) exporting products beyond their state boundaries.
While the U.S. will unquestionably remain the
Much more research is needed to under- leading influencer of cannabis culture, with the
stand the impact of the different cannabis states serving as laboratories of innovation and
compounds on the consumer experience. Con- consumer cool, the country’s leadership in scien-
sidering that even identical clones grown in tific research, production, global distribution and
different conditions will yield flower with varied foreign direct investment will be determined by
chemical profiles, it is critical to understand how the plant’s status under federal law.
minor variances in the plant’s chemical profile can
influence the effects experienced by the con- With legalization strongly supported by
sumer. Further research in this area will not only some presidential candidates, the likelihood of
unlock considerable new opportunities in the federal action on cannabis after the 2020 elec-
effect-based consumer product environment, tion has increased substantially. However, with
they will enable greater customization of the many competing proposals presented, it remains
formulations to individual consumers’ unique to be seen whether a national policy will cohere
endocannabinoid profile. that invests in clinical and industrial research,
addresses the broad and systemic impact of the
Consumer education is needed for at-risk inequity in cannabis prohibition enforcement, and
consumer groups. People with a history of, or at facilitates a regulatory environment that increases
high risk of mental health issues, are the most business efficiency, including inter-state and
vulnerable to experiencing negative psychological international expansion.

INCREASE YOUR BRAND AWARENESS
IN THE GLOBAL CANNABIS INDUSTRY
New Frontier Data

Report Sponsorships Reach:
- 80 Nations
- 50,000 Monthly visitors
- 55,000 Newsletter subscribers THE GLOBAL
STATE OF
- 11 Million Affiliate reach
IN PARTNERSHIP WITH
HEMP
- 7 Billion in media reach
© NEW FRONTIER DATA. ALL RIGHTS RESERVED.
Sponsored by:
Published by:
© NEW FRONTIER DATA, ALL RIGHTS RESERVED
Email: Sponsor@NewFrontierData.com
AS FEATURED IN:
WE ARE YOUR #1
TRUSTED SOURCE
FOR WHITE AND
PRIVATE LABEL
FINISHED
PRODUCTS:
CBD TINCTURES
CBD SOFT GELS
CBD GUMMIES
CBD HARD CANDY
CBD CHOCOLATE
CBD COFFEE
HEMP FLOWER
HEMP CIGARETTES
CBD VAPE E-LIQUIDS
CBD VAPE CARTRIDGES & PENS
CBD HEALTH & BEAUTY TOPICALS
ANIMAL HEALTH & WELLNESS PRODUCTS
LEADING IN USA HEMP DERIVED

CBD FINISHED PRODUCTS
We have partnered with the BEST of the BEST in each vertical within our industry to supplement our
wide range of core competencies and provide a true turnkey product development and manufacturing
solution for our customers. Our unparalleled agricultural supply chain, network of premier manufacturing
partners and, unique competitive advantages and exclusive offerings makes Global Cannabinoids your
number one source for premium USA hemp-derived cannabinoid-rich ingredients and retail-ready
finished products. Visit us online to register your B2B account to fast track your CBD
brand launch today!
globalcannabinoids.io
COPYRIGHT
Copyright © 2019 by Frontier Financial While every effort has been made by
Group, Inc., dba/ New Frontier Data. All New Frontier Data, Inc. to ensure the
rights reserved. Photocopying or repro- accuracy of information in this report,
ducing this report in any form, including it accepts no responsibility for errors
electronic or facsimile transmission, or omissions. The report is sold as is,
scanning or electronic storage, is a viola- without warranty of any kind, either
tion of federal copyright law and is strictly express or implied, respecting its con-
prohibited without the publisher’s express tents, including but not limited to implied
written permission. warranties for the report’s quality, per-
formance, merchantability, or fitness
This report may not be resold. New for any particular purpose. Neither New
Frontier Data only sells its publication Frontier Data nor its dealers of distrib-
directly or through authorized resellers. utors shall be liable to the purchaser or
Information concerning authorized any other person or entity with respect
resellers may be obtained from New to any liability, loss, or damage caused
Frontier Data, 1400 I Street NW, Suite or alleged to be caused directly or indi-
350, Washington, DC 20005. rectly by this report.
H E A D Q UA R T E R S
1400 I Street NW / Suite 350 / Washington, DC 20005
S A L E S & M A R KE T I N G
535 16th Street / Suite 620 / Denver, CO 80202
info@NewFrontierData.com 844-420-D8TA
NewFrontierData.com
NewFrontierData.com
HempBizJournal.com
HempBizJournal.com

EXCELLENCE IN
TECHNOLOGY AWARD
EXCELLENCE
STRATEGY IN
& INNOVATION COMPANY
TECHNOLOGY AWARD
2 YEARS IN A ROW
STRATEGY & INNOVATION COMPANY
2 YEARS IN A ROW

NFD TheUSCannabisReport2019

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

NFD TheUSCannabisReport2019

Uploaded by

Copyright:

Available Formats

THE

© NEW FRONTIER DATA. ALL RIGHTS RESERVED.

© NEW FRONTIER DATA, ALL RIGHTS RESERVED | NEWFRONTIERDATA.COM | 1

Usage rates have risen at disparate rates nationally,

© NEW FRONTIER DATA, ALL RIGHTS RESERVED | NEWFRONTIERDATA.COM | 2

ACCESS OUR LIBRARY

Start Your Free Trial at: Equio.io

FULL SPECTRUM DISTILLATE

BROAD SPECTRUM DISTILLATE

CRYSTAL RESISTANT BROAD

FULL SPECTRUM WHOLE

THC FREE WHOLE HEMP EXTRACT

WATER SOLUBLE LIQUIDS

WATER SOLUBLE POWDER

LEADING IN BULK & WHOLESALE

New Frontier Data is an independent, Core Values

We are committed to the highest standards and

© NEW FRONTIER DATA, ALL RIGHTS RESERVED | NEWFRONTIERDATA.COM | 5

Kacey Morrissey, Director of Industry

© NEW FRONTIER DATA, ALL RIGHTS RESERVED | NEWFRONTIERDATA.COM | 6

Market Growth Continues

Legal Adult-Use Sales: 15.8% $23.2

Total Legal Sales: 16.2% $20.2

$4.6 $4.4 $6.0 $7.7 $9.1 $10.4 $11.5 $12.3 $13.1

2017 2018 2019 2020 2021 2022 2023 2024 2025

 Legal Adult-Use Sales  Legal Medical Use Sales

© NEW FRONTIER DATA, ALL RIGHTS RESERVED | NEWFRONTIERDATA.COM | 7

While competitive forces and economies of scale

their premium pricing better than flower - which Ohio 11%

Oregon, and Massachusetts. 4%

Note: “Rest of states combined” includes annual revenue projections for 22

© NEW FRONTIER DATA, ALL RIGHTS RESERVED | NEWFRONTIERDATA.COM | 8

Additional States Currently Growth in Illicit Market

Potential Medical Revenue: $1.7 billion

Potential Adult-Use Revenue: $9.7 billion

Total Potential Revenue: $11.4 billion

Source: New Frontier Data

© NEW FRONTIER DATA, ALL RIGHTS RESERVED | NEWFRONTIERDATA.COM | 9

 Legal Adult-Use  Legal Medical Use Illicit Market

© NEW FRONTIER DATA, ALL RIGHTS RESERVED | NEWFRONTIERDATA.COM | 10

Texas North Carolina Georgia Virginia Indiana Tennessee Wisconsin

Source: New Frontier Data

• Groundbreaking insights into cannabis

retail access in program growth

• How different regulatory structures

© NEW FRONTIER DATA, ALL RIGHTS RESERVED | NEWFRONTIERDATA.COM | 11

We obtained data from federal, state, and munic- R E TA I L S A L E S

New Frontier Data 2018 Cannabis

online survey in order to assess cannabis con- 3,138 ±1.75%

© NEW FRONTIER DATA, ALL RIGHTS RESERVED | NEWFRONTIERDATA.COM | 12

© NEW FRONTIER DATA, ALL RIGHTS RESERVED | NEWFRONTIERDATA.COM | 13

A N C I L L A R Y C O M PA N I E S Market Projection Methodology

© NEW FRONTIER DATA, ALL RIGHTS RESERVED | NEWFRONTIERDATA.COM | 14

• Monthly changes in patient populations

• Monthly changes in medical cannabis

• Monthly changes in expenditures

• Interplay between medical and adult use

• Analysis of each state’s regulatory

• Time between passage of each

© NEW FRONTIER DATA, ALL RIGHTS RESERVED | NEWFRONTIERDATA.COM | 15

 Medical & Adult-Use  Medical Use Only  No Legal High-THC Market

Source: New Frontier Data

© NEW FRONTIER DATA, ALL RIGHTS RESERVED | NEWFRONTIERDATA.COM | 16

1998: OR, 2007: 2010: 2014: 2017:

Legal Adult-Use Sales Legal Medical Use Sales

Legal Adult-Use Legal Medical Use Illicit Market

Medical & Adult-Use Medical Use Only No Legal High-THC Market

Legal Adult-Use Sales Legal Medical Use Sales

Legal Adult-Use Legal Medical Use

Medical Business Licenses Retail Establishment Licenses

Total Cannabis Consumers (past month) Medical Cannabis Patients

Legal Adult-Use Legal Medical Use

2010 Reported Monthly Usage 2017 Reported Monthly Usage

Most Above-Average More Liberal Than Below-Average Average