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Gray-market businesses take advantage of loopholes before 2019 legalization

August 9, 2018

WashingtonNew Frontier Data, the global authority in data analytics and business intelligence in the cannabis industry, releases 2018 Cannabis Industry Trends Report: Market Insights. This report examines trends in the burgeoning cannabis industry across the United States and explores market demand, federal and legislative action, compliant banking practices, and the opioid epidemic. In Maine, it is currently legal for adults older than 21 to grow, possess, and consume cannabis, and operators in the state’s illicit market are exploiting this gap - largely at the expense of the state’s regulated medical cannabis industry.

“Under Maine’s laws, adults can gift up to 2.5 ounces of cannabis to another adult so long as they do not receive anything in return, and several businesses have begun to take advantage of this loophole, similar to the gray market in Washington, D.C. Businesses sell products unrelated to cannabis at an inflated price while including a ‘free gift’ of cannabis with the purchase,” saidKacey Morrissey, Associate Director of Industry Analytics at New Frontier Data.

While such gray-market businesses are unlikely to have the same variety of products offered by a retail dispensary (i.e., concentrates, edibles, topicals, and flower) the lower illicit-market prices and convenience of delivery remain sufficient to draw patients away from regulated storefront medical dispensaries.  Sales of medical cannabis through Maine’s eight licensed dispensaries fell by 9% in 2017, and there has been an 18% decline in patient-printed certifications.

Facing an active and competitive gray market, medical dispensary operators (and future licensed adult-use dispensary operators) will need to go above and beyond what illicit-market businesses provide in terms of quality, service, and product selection if they hope to lure more consumers into the legal market.

Visit www.newfrontierdata.com/trends to download the full report.

About New Frontier Data:

New Frontier Data provides objective, rigorous and comprehensive analysis and reporting about the nascent and underserved cannabis industry worldwide. New Frontier Data’s analytics and reports have been cited in over 65 countries around the world to inform industry leaders, investors, policymakers and others. New Frontier Data, the premiere and only Big Data shop in the sector, looks beyond plant cultivation and distribution to raise the industry bar and improve visibility into what will inevitably soon be a mature and more complex global market. Founded in 2014, New Frontier Data is headquartered in Washington, D.C. and has additional offices in Denver, Colorado.

New Frontier Data does not take a position on the merits of cannabis legalization. Rather, its mission and mandate are to inform cannabis-related policy and business decisions through rigorous, issue-neutral and comprehensive analysis of the legal cannabis industry. For more information about New Frontier Data please visit: www.newfrontierdata.com.

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