The legal cannabis market is booming throughout the United States, and it appears that the industry is going to continue to thrive in the years ahead. A recent economic study found that annual retail sales of marijuana will eclipse $43 billion by 2025. These financial projections, along with optimism about federal legalization efforts, have cannabis companies and their investors excited about what the future holds for the industry in general.
To learn more, keep reading this blog.
Study: Retail Cannabis Market Will Remain Strong
New Frontier Data, a company that specializes in cannabis market research, has released an economic analysis that projects retail sales of both adult-use marijuana and medical marijuana to reach an astonishing figure in just a few years. According to the study, the legal cannabis market in the U.S. will get even stronger as more and more states look to pass their own legalization laws. By 2025, the study indicates, annual sales of cannabis at retail dispensaries in the United States will be around $43 billion. To put that number in perspective, total combined sales of adult-use marijuana and medical use marijuana were roughly $20 billion in 2020.
In the current climate, roughly two-thirds of all retail marijuana transactions involve recreational marijuana and related products, and the New Frontier Data research shows that the majority of retail cannabis sales will continue to involve adult-use marijuana. Still, sales of medical cannabis sales should remain strong, particularly as more and more people look for alternative ways to relieve pain and cope with debilitating medical conditions and diseases.
State Cannabis Markets Are Thriving
The legal marijuana market has hit historic levels in 2021, with each new month seeing retail cannabis sales in states across the country set a new all-time record. For example, Colorado recently recorded a new quarterly high for adult-use cannabis sales.
In addition to sales surging in states with established cannabis markets, several more states are likely to generate millions of dollars in cannabis revenues in the coming months when their own markets are established. As many as 10 new state markets are expected to be activated over the next two years. This includes burgeoning cannabis markets in both New York and New Jersey, where state lawmakers have finally begun implementing the framework for legal sales of recreational marijuana by licensed cannabis operators. These markets could be vital to the success of the cannabis industry generally, especially since market research forecasts that more than 40% of cannabis demand in the U.S. will be met by legal transactions in regulated cannabis markets by 2025.
Is Federal Legalization of Cannabis on the Horizon?
All indications are that federal legalization of cannabis for recreational use is on the horizon. Lawmakers in the United States Congress have been working hard to get bipartisan approval in both the House and the Senate for national legalization, and the expectation among cannabis industry insiders is that it is probably only a matter of time before certain obstacles and regulatory issues are overcome. The recent enthusiasm for legal cannabis at the federal level has coincided with the strong growth of cannabis markets in states where either recreational marijuana or medical marijuana is already legal, suggesting that some legislators may see an opportunity for additional tax revenues at a time when government spending has become a major talking point for the upcoming 2022 election. The fact that state and local cannabis markets thrived during the COVID-19 pandemic may also be a factor in the support for national cannabis reform measures.
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