By Monterey Bud

 

The ArcView Group is projecting in their most recent iteration of The State of Legal Marijuana Markets 5th Edition, North America’s legal cannabis industry will continue to grow at a 27% compounded annual growth rate (CAGR) for the next five years.

Hitting an anticipated $22.6 billion by 2021 – despite threats from the current AG’s office – the report notes by 2019 adult-use expenditures will exceed medical spending for the first time. Nearly doubling medical marijuana sales by 2021, adult-use recreational sales are projected to hit $14.98 billion.

Medical Marijuana vs. Adult Use Marijuana Sales

Marijuana Industry Projected Growth

In addition to analyzing current and projected medical-use vs. adult-use, the report measures the industry’s projected five-year growth rate against past $5 billion-plus industries. Far less likely to become obsolete then basic cable or home videos, North America’s marijuana industry seems to share a similar trajectory as the broadband access industry.

Growing Support for Marijuana Legalization Continues

Also noteworthy, the report assesses the ever-increasing support for legalization across the country. Now, with a greater understanding of the medicinal value and relaxing nature of the cannabis plant, the most recent Pew Research Center poll shows 57% of U.S. adults believe marijuana should be legalized.

Average Annual Sales Per Dispensary

Additionally, the ArcView report illustrates just how much weed is sold annually from legal dispensaries in Colorado, Washington, and Oregon. While the average sales numbers may appear impressive at first glance, it’s important to remember the associated startup costs, ongoing operating expenses and the highly competitive marketplace driving prices down.

Great info for the industry insider, below are a few intriguing facts from the ArcView report.

• Legal weed sales cultivated a 34% CAGR from 2014 -2016.
• Adult-use sales are only up 22% on year-over-year basis (2016 – 2017).
• Marijuana sales are projected to grow at a 27% CAGR over next five years.
• 2018 Marijuana sales are projected to grow thanks to the on boarding of Canada, California, Massachusetts, Maine, and Nevada, in addition to medical marijuana sales in Arkansas, North Dakota, Florida, Montana, and Hawaii. 
• Collectively cultivating the meager $6.7-billion legal marijuana market of 2016 into a fiscally respectable $22.6 billion behemoth in 2021, North America’s legal marijuana market will outperform at least two noteworthy industries that once enjoyed an annual spending of $5 billion or more. 
• $56.1 billion was spent on both illegal and legal marijuana products by North Americans in 2016. Unfortunately – only $6.7 billion was legally purchased and taxed. 
• Legal marijuana sales erode black market profit. Anticipated to accelerate in 2018,  the erosion of black market sales will continue as California and Canada rollout their legal marijuana industries.
• By 2019 adult-use purchases will surpass MMJ spending for first time.
• Flower, followed by concentrates and edibles, were the most commonly purchased items at Colorado dispensaries.

ArcView Group’s Editor-in-Chief Tom Adams called “the explosion in the number of brands and products” nothing short of “dizzying.”  A firm believer in the industry’s future growth, Adams explained, “When the #1 concentrate brand in CO grows 84 percent but its market share percentage remains constant it becomes clear we are in a remarkable business boom. It reminds me of 1998, when Google was just one of dozens of search engines, or 1988 when Blockbuster was just one of dozens of video store chains; future market leaders are just now being launched.”