Cannabis sales in the U.S. will continue to rise in 2018. The industry has maintained a strong growth trajectory for the last decade. In fact, excitement about cannabis ventures is at an all-time high, as celebrities and investors alike cash in on what appears to be a cash cow industry. Perhaps one the biggest announcements following California’s Jan 1 legalization of recreational marijuana, is Former heavy weight boxing champ Mike Tyson breaking ground on a 40-acre marijuana farm. Last year, Hip Hop Star Snoop Dogg and Paypal Founder Peter Thiel made the news with an announcement about their cannabis business partnership; and, Warren Buffet’s company Berkshire Hathaway, has a subsidiary which has been providing ancillary products to the cannabis industry for years.
Cannabis sales for 2018 are expected to reach $8 billion in the U.S., with $3 billion attributed to medical use and $5 billion attributed to recreational use. Researchers from The ArcView Group, a cannabis industry investment and research firm based in Oakland, California, found that the U.S. market for legal cannabis grew 74 percent in 2014 to $2.7 billion. By 2016, this market posted $6.7 billion in revenue, up 30% from the the previous year.
“Aside from cryptocurrency, there is simply no other industry changing as rapidly or as unevenly as the cannabis sector,” said Troy Dayton, CEO of The Arcview Group.
Medical Cannabis vs. Recreational Cannabis Sales Projections
January 1st, 2018 is an important date for the U.S. cannabis industry. After years of tireless legislation and controversy, marijuana finally became legal in the State of California for recreational use. California is the largest state in the U.S. and the world’s sixth largest economy. Thus, the economic impact on both a state and national level should be materially impacted.
One study on statista.com, forecasts stronger sales for both medical and recreational cannabis in 2018; the study projects sales to reach $4.75 billion and $6 billion respectively. Both recreational and medicinal uses are expected to reach $20 billion in 2023 and $24 billion in 2025.
U.S. States Experiencing the Largest Cannabis Growth
Today, the following states are considered Marijuana grower-friendly: California, Colorado, Washington, Oregon, New Mexico, Nevada, Alaska, Arizona, Massachusetts, Michigan, Maine, the District of Columbia (D.C.) and Hawaii. While each state has a different user and affordability profile, there are still several states that trend regularly in terms of their support for cannabis.
In 2012, Colorado became the first U.S. state to legalize recreational marijuana. The state also has a reputation of having more affordable product when compared to other states. Apparently, Colorado also receives the most “cannabis” or “marijuana” Google searchers.
Washington’s marijuana product has a reputation of being even less expensive than Colorado’s. The state recently reported 81 marijuana users per capita.
It is a well-known fact that Oregon has the cheapest cannabis. Otherwise, public expression about cannabis is low in this state.
California has some of the more expensive product. However, approximately 6.97% of California residents describe themselves as regular users.
Growth Seeps into Peripheral Businesses
Today more than ever, accountants and attorneys are answering calls related to cannabis business support. Sites like Ganjapreneur.com and NextCannabis.com offer everything from creative support to private equity solutions for new cannabis deals. THC University, an online school, offers over 150 hours of expert training on marijuana growing, budtending, cannabis business, and the latest regulations; and business schools all over the country are integrating cannabis business practices into case studies.
Clearly cannabis is becoming more mainstream as the industry continues to grow. We re always on the lookout for the most promising public companies that we believe are best positioned to benefit from the U.S. cannabis expansion. Our favorites in the space continue to be GB Sciences (GBLX) and CLS Holdings (CLSH).
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