Despite the current levels of uncertainty, many cultivators and cannabis businesses have remained only slightly concerned or unshaken. The confidence many indicated could be a reflection of the major progress that continues to be made in the fight to end prohibition, as well as the impact the legal cannabis industry continues to have on state and local economies. With eight U.S. states now legalizing adult-use marijuana—including two on the East Coast—and over half the country (and growing) legalizing some form of medical marijuana, the industry continues its rapid growth trajectory. Canada’s medical marijuana program continues to expand as well, now serving more than 130,000 patients, and full legalization looms on the country’s horizon. And of course the recreational market in Canada is going fully legal come July 2018 with most provinces eluding to their plan on how to regulate it provincially.
Marijuana sales in North America reached $6.73 billion in 2016—reflecting 34% growth over 2015 ($5.04 billion), according to Arcview Market Research/BDS Analytics. The research firm projects sales to jump to $21.6 billion by 2021, representing a 26% compound annual growth rate (CAGR).
Another market research firm, New Frontier Data, estimates 2016 marijuana sales at $7.2 billion and forecasts the market to reach $24 billion by 2025, reflecting a 15% CAGR.
The cannabis industry continues to exceed other industries’ growth rates and retain the title of the “fastest-growing industry in the U.S.” as the Huffington Post reported in 2015.
For example, the fast-growing U.S. organic industry reached a new high of $43.3 billion in 2015, reflecting 11% growth over the previous year, according to the Organic Trade Association. The U.S. video game industry is projected to grow by a 3.6% CAGR to reach $20.3 billion in 2020, according to a report by PwC.
States, Provinces and municipalities continue to reap the benefits of marijuana legalization. Overall state tax revenue generated from retail marijuana sales is projected to reach $2.3 billion by 2020, according to New Frontier Data.
Job creation, which has largely remained untracked, is starting to be examined. Economic and management consulting group Whitney Economics recently found that in Oregon alone, 12,500 jobs have been created in the cannabis industry, generating $315 million in salaries averaging over $12/hour.
The entire cannabis cultivation market continue to grow as well. According to the Cannabis Business Times’ research, 77% of cultivators plan to add square footage to their existing operations in the next two years—an average of 22,300 square feet at that.
While cultivators in some regions, most notably Washington state—where supply continues to outweigh demand—struggle to maintain, not to mention grow their businesses, growth is on the horizon for this industry segment as a whole, as medical markets continue to expand and legalization continues to spread across the country.