P.R.’s medical cannabis market on verge of saturation, study shows
Local startup Abexus Analytics recently published Puerto Rico’s first “Medical Cannabis Market Saturation Index” that offers details on the local areas with potential market saturation of cannabis dispensaries and how such distribution differs with traditional pharmacies throughout the island.
“In Puerto Rico the number of dispensaries, total manufacturing capacity and the number of certified patients have all grown in a relatively short time. If local dispensaries increase to the already pre-qualified number of 246, a dramatic drop in sales per dispensary is expected,” according to the report in which the firm tested its technology to analyze Puerto Rico’s cannabis industry.
“This trend will increase a downward pressure on prices and limit potential market growth. Moreover, there is no readily available data on total production islandwide, this presents the biggest risk for the industry,” the report stated.
The results point to an industry that could serve almost 246,000 patients across the island and concentrated in areas with higher incomes.
“Our analyses show that not all of Puerto Rico is saturated when considering cannabis dispensaries. A fraction of areas, particularly those in the Hato Rey district, show the highest levels of market saturation,” Abexus’ Chief Operating Officer Eduardo Burgos-Suazo said.
“Outside Hato Rey, most of the island’s economic corridors do not show strong levels of saturation. However, tourists areas such as Condado and Isla Verde have dramatically increased their retail offer due to demand from visitors from the U.S. mainland,” said Burgos, who is also a college professor.
The report explains that if more dispensaries are added to Hato Rey, the industry could experience a plunge in prices. Such price change will initially benefit medical cannabis patients, nonetheless, it could also provoke a collapse in the industry’s supply chain.
Abexus Analytics is a startup currently operating under Puerto Rico’s business acceleration program, Parallel 18.
The startup specializes in using artificial intelligence to combine their knowledge in data science, econometrics and software development. Their platform specializes in combining a company’s internal data with external economic data.