Many cannabis industry observers believe that marijuana businesses could provide a boost to the U.S. economy of more than $130 billion annually by 2024. This figure includes both projected sales by dispensaries in states where cannabis is legal and the additional economic impact of retail marijuana businesses in those states.
Cannabis Industry Generates Billions of Dollars for Local Cities and States
Despite the devastating effects of the coronavirus on the U.S. economy, the retail cannabis industry is thriving as more people than ever are purchasing recreational marijuana and medical marijuana from dispensaries across the country. It is estimated that legal cannabis sales will total more than $50 billion in 2020. Last year, U.S. dispensaries made roughly $46 billion in sales. By 2024, the total sales of cannabis in the United States could be as much as $130 billion – representing a 181% increase from just five (5) years earlier.
The reach of the United States cannabis industry is not limited to just the revenues generated by businesses that sell legal cannabis. The cannabis industry also has a significant impact on the entire U.S. economy by injecting money into local cities and states. In fact, the actual economic value of every $1 spent at marijuana dispensaries is calculated to be $2.50. This means that the overall contribution of the cannabis industry to the economy can be felt in other industries as well, whether it is through:
- Tourism in recreational marijuana states where visitors may want the thrill of purchasing a previously illicit substance.
- Real estate and construction activity to build and renovate cultivation sites, manufacturing facilities, and retail dispensaries.
- Taxes on legal cannabis sales, which can provide state and local governments with hundreds of millions of dollars to pay for important public works programs.
Retail Marijuana Sales Remain Strong During COVID-19 Pandemic
The COVID-19 pandemic caused a great deal of uncertainty among cannabis industry insiders because no one really knew how the public might react to business shutdown orders and local stay-at-home orders. But it appears that many legal weed businesses are doing better than ever. One possible reason for the continued success of retail cannabis dispensaries during the coronavirus crisis is the special exception that was made for these types of businesses: cities and states across the country declared that medical and recreational marijuana stores were “essential businesses” and, as such, could remain open despite shutdown orders for most other retail establishments.
Another reason that marijuana businesses have been able to withstand the financial devastation felt by other industries during the pandemic is that the fundamentals of the cannabis industry are quite strong: demand for marijuana remains high, new dispensaries are generating more jobs for marijuana cultivators and retail workers, and capital has been made available to cannabis operators through sale-leaseback transactions. These fundamentals also bode well for the future of the industry because they mean that any short-term downturn in retail sales could potentially be offset by anticipated long-term gains for cannabis operators and investors.
Contact Scythian to Learn About Cannabis Real Estate Opportunities
The cannabis industry figures to be an important part of the U.S. economy in the years ahead. This provides cannabis operators and cannabis investors with a real opportunity to make money. Scythian Real Estate Fund is a Denver-based company with an expanding portfolio of nationwide cannabis real estate assets valued at approximately $40 million, as well as an acquisition pipeline of additional assets in numerous states.
For more information about cannabis real estate, email Scythian today.
PLEASE NOTE THAT THIS BLOG IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY SECURITIES IN SCYTHIAN REAL ESTATE FUND.