The Cannabis Industry Annual Report: 2017 Legal · PDF fileThe Cannabis Industry Annual...
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Private & Confidential: Not to be disseminated without the expressed written consent of Frontier Financial Group, Inc. © FRONTIER FINANCIAL GROUP, INC • FRONTIERFINANCIALS.COM The Cannabis Industry Annual Report: 2017 Legal Marijuana Outlook
Transcript of The Cannabis Industry Annual Report: 2017 Legal · PDF fileThe Cannabis Industry Annual...
Private & Confidential : Not to be disseminated without the expressed written consent of Frontier Financial Group, Inc. © FRONTIER FINANCIAL GROUP, INC • FRONTIERFINANCIALS.COM
Private & Confidential : Not to be disseminated without the expressed written consent of Frontier Financial Group, Inc. © FRONTIER FINANCIAL GROUP, INC • FRONTIERFINANCIALS.COM
The Cannabis Industry Annual Report:2017 Legal Marijuana Outlook
• About New Frontier Data• Meet The Speakers• Giadha Aguirre De Carcer, New Frontier Data• Leslie Bocksor, Electrum Partners• John Kagia, New Frontier Data
• Key Findings: The Cannabis Industry Annual Report• Q&A
AGENDA
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MEET THE SPEAKERS
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Giadha Aguirre De CarcerFounder & CEO, New Frontier DataDe Carcer is the Founder and Chief Executive Officer of Frontier Financial Group Inc. dba New Frontier Data. She is an entrepreneur with over 20 years of experience in business execution, management and strategic business development with an emphasis on emerging markets.
De Carcer worked in investment banking with JPMorgan Chase in Manhattan and London, and served as a senior consultant in the Defense, Technology, Telecommunication sectors in both the commercial and government sectors domestically and abroad. She has successfully launched and operated four data-driven businesses and is considered an expert in strategic positioning and risk management in emerging high growth markets.
MEET THE SPEAKERS
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Committed to a culture of compassion at Electrum Partners and throughout the industry, he takes pride in ushering in changes that rewrite history, whether it’s the empathic opening of patient access, or the invention of a national innovation funding reset button. His far-reaching banking and entrepreneurial experience and inimitable style are bolstered with his knowledge of any cannabis vertical -- from domestic and international policy to finding your niche investing opportunity, from supercritical extraction to ERP solutions, from seed-to-sale tracking to cannabidiol(CBD) to the entourage effect of strategic business integration. Bocskor has become one of the most influential people in the cannabis space, guiding policy and reform.
Leslie BocksorPresident & Founder, Electrum Partners
MEET THE SPEAKERS
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John Kagia is the Executive Vice President of Industry Analytics for New Frontier. He applies his keen understanding of market research, business strategy and industry analysis to help high performing organizations achieve their strategic objectives.
Leveraging his years of experience managing research studies for industry-leading clients including Accenture, Microsoft, The George Washington University, and the U.S. Department of State, John brings a keen understanding of how market insights enable organizations to plan, grow, compete, and measure performance more effectively.
John KagiaExecutive Vice President of Industry Analytics, New Frontier Data
KEY FINDINGS
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U.S. NATIONAL MARKET
GROWTH PROJECTIONS
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$4.6
7
$5.3
2
$6.0
7
$6.8
8
$7.8
0
$8.9
0
$10.
06
$11.
26
$12.
33
$13.
22
$1.8
9 $2.6
5 $4.7
5 $6.5
0 $8.2
2 $9.4
6
$9.8
3
$10.
20
$10.
55
$10.
86
$-
$5
$10
$15
$20
$25
$30
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Growth of Legal Medical & Adult Use Marijuana Sales2016-2025
Recreational TotalMedical Total
$6.5
6 BN
$7.9
7BN
$13.
38BN
$16.
02BN
$18.
37BN
$19.
89BN
$21.
46BN
$22.
87BN
$24.
07BN
$10.
82BN
Compound Annual Growth Rate: 16%
CAN CANNABIS SOLVE THE OPIOID CRISIS?
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81%76%
67% 63% 59%
Arizona Hawaii Colorado Nevada Oregon
Chronic Pain Patients are the Majority in MMJ Programs
“There is conclusive or substantial evidence that cannabis [is] effective for the treatment of chronic pain in adults.”
National Academies of Science (2017)
$1.96 BILLIONMedicare Opioids top 3 pain medication cost
(OxyContin, Hydrocodone, Fentanyl)
100 MILLION+Americans suffering from CHRONIC PAIN
2 MILLION+Americans ADDICTED to prescription pain
killers
MEDICAL CANNABIS REDUCES DRUG
DEPENDENCY & OVERDOSE DEATHS
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85,148
95,672
States With a Medical Cannabis Law
States Without a Medical Cannabis Law
Annual Number of Daily Doses Prescribed Per Physician11%
REDUCTION IN DAILY PHARMACEUTICAL DOSES PRESCRIBED
$220 MILLIONPOTENTIAL MEDICAID SAVINGS IN
OPIOID PRESCIRPTIONS
25%FEWER OPIOID OVERDOSE DEATHS IN
MEDICAL CANNABIS STATES
8,300FEWER OPIOID OVERDOSE DEATHS IN
MEDICAL CANNABIS STATES
REDUCING PRESCRIPTION DRUG USE & COSTS
REDUCING OPIOID RELATED DEATHS
=
CANNABIS TAX REVENUES
ARE A BOON FOR STATE COFFERS
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$405 Million
$96 Million
$1.4 Billion
$559 Million
$- $500 $1,000 $1,500 $ Millions
ADULT USE MARKETSState Cannabis Tax Revenue from Retail Sales
Cannabis Retail TaxesState Sales Taxes
2017Total Retail Taxes$655 Million
2020 Total Retail Taxes
$1.8 Billion
TOTAL MEDICAL & ADULT USE RETAIL CANNABIS TAX REVENUES
2017$745 Million
2020 $2.3 Billion
LEGAL CANNABIS AS AN
ENGINE FOR NEW JOB CREATION
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Retail Operations
35%
Administration22%
Manufacturing16%
Management15%
Agriculture12%
Direct FTE Jobs by Sector
39,636
45,590
198,195
283,422
Induced
Indirect
Direct
Total
2020 Cannabis Industry Potential Job Creation
A GROWING MAJORITY
NOW SUPPORT LEGAL CANNABIS
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3%
9%
7%
26%
55%
0% 10% 20% 30% 40% 50% 60%
Don't know
Cannabis should be illegal
Cannabis should be decriminalized, eliminating criminal penalties but not
regulating or taxing it
Cannabis should only be legal for medical use with a doctor's
recommendation
Cannabis should be legalized, regulated and taxed like cigarettes and alcohol
Cannabis Legalization Views
Source: New Frontier Data 2017 Cannabis Attitudes Survey
2017 New Frontier Data Cannabis Attitudes Survey
1,671 RespondentsFielded Jan. 12 – Jan. 15, 2017
Survey Partner: Full Circle Research
STRONG SUPPORT FOR F
FEDERAL LEGALIZATION & MEDICAL USE
© F R O N T I E R F I N A N C I A L G R O U P , I N C • 1 3Source: New Frontier Data 2017 Cannabis Attitudes Survey
13%
17%
63%
0% 20% 40% 60% 80%
The U.S. government's war on drugs has been effective
at reducing cannabis use
Preventing cannabis use should be a high priority for
the federal government
The federal government should legalize cannabis
Views of Federal Policy
12%
13%
28%
28%
28%
34%
86%
0% 20% 40% 60% 80% 100%
People who use cannabis should be treated like criminals
People who use cannabis should be arrested
If cannabis is legalized, the government should keep track of cannabis users
I am more likely to consider using cannabis if it is legal
Cannabis is a dangerous drug
Cannabis is highly addictive
Cannabis has valid medical uses
Cannabis Attitudes
2016: A LANDMARK YEAR
FOR CANNABIS LEGALIZATION
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63.8%
57.8%
71.3%
53.2%
54.5%
53.7%
50.3%
57.1%
48.7%
0% 50% 100%
North Dakota
Montana
Florida
Arkansas
Nevada
Massachusetts
Maine
California
Arizona
2016 Cannabis Legalization Initiative Results
AVERAGE ADULT USE VOTE
53%
AVERAGE MEDICAL USE
VOTE
62%
ADU
LT U
SEM
EDIC
AL U
SE
A MAJORITY NOW LIVE IN
STATES WITH LEGAL CANNABIS ACCESS
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32%
63%
21%
95%
0% 20% 40% 60% 80% 100%
CBD States
Medical States
Adult Use States
Any Cannabis Law (Adult Use, Medical or CBD)
Percent of U.S. Population with Legal Cannabis Access
31%Population of States Which
Expanded Legal Access in in 2016
ANY CANNABIS LAW306 Million
ADULT USE LAWS68 Million
MEDICAL USE LAWS203 Million
NUMBER OF AMERICANS LIVING UNDER…
PLUNGING RETAIL PRICES HAVE FUELED
SALES, REVENUE GROWTH IN WASHINGTON
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$44.50
$12.77
$-
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
$40.00
$45.00
$50.00
$-
$10,000,000
$20,000,000
$30,000,000
$40,000,000
$50,000,000
$60,000,000
$70,000,000
$80,000,000 As Avg. Price Per Single Gram Falls, Monthly Sales Have Soared
Monthly Retailer Sales
Price Per Single Gram
2015Retailers: 190
Revenue/Retailer: $2.27 Million
2016Retailers: 337
Revenue/Retailer: $2.33 Million
GROWTH IN CONCENTRATE AND PRE-ROLL
SALES ARE ERODING FLOWER’S SHARE OF MARKET
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4.1%7.2%
7.0%
84.7%
72.0%
64.4%
9.8%15.6% 21.0%
1.4%5.3%
7.7%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16
Shar
e of S
ales
2016 Share of Sales by Product Category
Edibles
Flower
Concentrates
Pre-Rolls
Source: Baker
THE GROWING IMPERATIVE TO BE COMPLIANT
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74.4
77.3
81.2
82.9
97.0
0 20 40 60 80 100 120
California
Washington
Nevada
Colorado
Illinois
Average Compliance Scores by State*
Source: Adherence Compliance
3%1% 3% 3%
34%56%
Washington Total Penalties 2014-2016
Penalty EscalationsDestructions of Harvestable PlantsRevocationsSuspensionsWritten Warnings
*Scores are based on a 100 point weighted scale using the Adherence Score Application.
Q&A
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