Now that California, Maine, Nevada and Massachusetts voted to legalize recreational marijuana, 21% of the U.S. population lives in a state where smoking weed is legal
Sales of marijuana grew 30% in 2016, and as long as acceptance continues to gain steam, the industry could hit $20.2 billion in North America within four years, according to a marijuana market research firm.
Cannabis sales are projected to grow at a compound annual rate of 25%, from $6.7 billion in 2016 to $20.2 billion by 2021, according to Arcview Market Research. The company will release a more detailed report in February.
Arcview’s forecast uses research from BDS Analytics, a cannabis business intelligence and market research firm, and incorporates marijuana-usage data from the National Institute on Drug Abuse. It also analyzes the growing acceptance of marijuana state by state and how future potential legalization in other states may impact the market. The forecast looks at how the Colorado, Oregon and Washington markets have matured and at Canada, which is pushing for nationwide legalization in 2017.
“The only consumer industry categories I’ve seen reach $5 billion in annual spending and then post anything like 25% compound annual growth in the next five years are cable television in the ’90s and broadband internet in the 2000s,” he added.
Some following the industry expect the market might be even bigger. Analysts at Cowen Washington Research Group wrote in September that legal marijuana could be a $50 billion industry in the U.S. by 2026. That estimate assumes that recreational use will be legal nationwide by then.
Other industry experts have suggested that national legalization may be four to eight years away.
That said, with California, Maine, Nevada and Massachusetts recently voting to legalize adult recreational use, 21% of the U.S. population lives in a state where consuming weed is legal.
And as marijuana itself gains popularity, so do different ways to ingest it. In Colorado, Washington and Oregon, the three largest legal adult markets, spending was up 62% through September after doubling in 2015. Adams said that growth was fueled, in large part, by the popularity growth of edibles and concentrates.