In news that will surely have heads of the alcohol industry soiling their pantaloons, the legal marijuana market is absolutely exploding. In 2015, legal cannabis sales jumped 17 percent, to $5.4 billion. This year the growth is expected to surge even more, to a mind-blowing 25 percent and are expected to reach $6.7 billion in total U.S. sales. The marijuana sales upturn is expected to continue to see monumental prosperity. A new report estimates the cannabis industry will grow to $21.8 billion in 2020. By 2020, 53 percent of the total market will be recreational use, a growth of more than 1,150 percent over the next four years.
The impressive new data was unveiled in the fourth edition of “The State of Legal Marijuana Markets,” a joint assessment from the research wing of the ArcView Group, a marijuana industry investment firm, and New Frontier, a cannabis analytics firm.
For comparison, the total alcoholic beverage sales in the United States in 2014 was $211 billion. The NFL made about $10 billion in revenue in 2013 and hopes to up that number to $27 billion by 2027.
These are ridiculous figures considering that as of right now there are only four states (Colorado, Washington, Oregon and Alaska) and the District of Columbia that have legalized marijuana for recreational use. But the market looks to expand quickly with as many as nine states that could legalize weed in 2016.
The cannabis boom is largely attributed to markets blossoming since the legalization of recreational marijuana in Colorado and Washington. The sales figures also includes medical marijuana programs in 23 states and Washington, D.C., which is now worth $5.4 billion up from $4.6 billion in 2014.
Recreational marijuana sales had a preposterous 184 percent increase from 2014 to 2015. Skyrocketing from $351 million in 2014 to an unimaginable $998 million in 2015. The tallies are extraordinary when you consider that the first recreational dispensaries opened for business in Colorado only two years ago.
The legal cannabis market shows no signs of leveling off; with a compound annual growth rate of nearly 30 percent over the next few years. “I think that we are going to see in 2016 this next wave of investors, the next wave of business operators, and people who’ve sort of been watching or dipping their toe in, really starting to swing for the fences and take it really seriously,” ArcView CEO Troy Dayton told Forbes.
“It is undeniable that cannabis is one of the fastest growing industries in the U.S.,” says Giadha DeCarcer, CEO of cannabis data analysis company New Frontier. “With nearly a dozen states debating changes to their cannabis laws in the coming year, 2016 will be the tipping point in which a majority of U.S. states transition from cannabis prohibition to some form of regulated legal market.”
According to Gallup, 58 percent of Americans now support legalization of cannabis for adult use, up from 36 percent in 2005.
We truly live in exciting times.
[Fortune]