US sales on course to top $26 Billion as regulated market thrives
US sales hit $20 billion in 2020 and are on pace to top $26 billion this year. Projections for 2025 are saying it will jump to $45.9 Billion.
When the cannabis industry descended upon Las Vegas last week for the biggest trade show in the business, MJBiz con, there was a good feeling in the air. Despite the doom and gloom of the last 18 months, including a global pandemic, disrupted supply chains, sky-high inflation and lobbying for federal legalisation, the US cannabis industry is booming!
Data from Marijuana Business Daily shared at the MJBizCon shows that sales hit $20 billion in 2020 and are on pace to top $26 billion this year. Projections for 2025 are saying it will jump to $45.9 Billion.
The acceleration of US sales is inevitable. Most US citizens already live in a state where cannabis is legal in one form or another. More than two-thirds of US states have already legalised medical cannabis. Of those, 18 have legalised cannabis for recreational use.
During months of lockdowns and restrictions, people stuck at home had money burning a hole in their pockets, with nowhere to go and nothing to buy. No surprise, therefore, that we saw a pandemic induced surge in cannabis spending. Helped along by the fact that Cannabis dispensaries were deemed "essential businesses",
However, the past 12 to 18 months of success is down to more than just the COVID crisis. Sales have continued to grow at a record pace across the US. "You're seeing the next phase of a maturing industry take hold here," said Chris Walsh, CEO and president of MJBizDaily.
Not long ago, a quarter of billion-dollar deals in the cannabis industry were a rare occurrence. Now they're becoming the norm. The rapid industry expansion is also creating jobs, according to Vangst, a cannabis industry job recruiting site. There were around 321,000 full-time jobs in the cannabis industry in 2020. This was up from 234,700 in the previous year.
It's not all plain sailing, however. There are still problems that need addressing. The US Food and Drug Administration is yet to provide official guidance on how hemp-derived cannabinoids, like CBD, can be included in commercial products.
California, the nation's most prominent cannabis market, continues to draw attention for the wrong reasons. Here the black market continues to flourish and steal away a large percentage of sales. The issues of accountability and social conscience are not forefront enough at present. Programs targeted toward social equity or repairing the damage from the War on Drugs are still in their infancy.
On the political side, the calls for federal marijuana reform and legalisation may have grown. Still, the lack of consensus among lawmakers and industry members means that change is not on the immediate horizon, even in the case of banking and tax reforms.
There have been ongoing efforts for some time now to change federal law and allow state-legal cannabis businesses access to traditional banking services. Because of its federal position as a Schedule I substance, some financial institutions have been reluctant to get involved. This has left businesses unable to access small business loans, COVID relief or insurance.
Businesses doing well are at real risk of theft, robberies, assaults and even murders, claim backers of the bill to reform banking practices.
The waiting game continues for the cannabis industry. It is an uphill battle, but the industry knows that federal legalisation is inevitable, however far away it may still be.
"When you get to the point when half of the country has legalised for adult use, we have now set a stage for inevitability. And that begins to change the tone and tenor in Washington." Steven Hawkins, CEO of US Cannabis Council and executive director of the Marijuana Policy Project.
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Liz Filmer
