Legal Marijuana Sales in the U.S. to Hit $6 Billion in 2018
NEW YORK ( MainStreet) According to Marijuana Business Daily, a growingly prominent industry news and trends website, legal medical and recreational sales in the U.S are on track to reach $6 billion annually by 2018.
In a new report called Marijuana Business Fact Book 2014, MBD forecasts that the retail marijuana industry will grow over 8 times in volume in the next four years. Similar commentaries have also noted that the marijuana market is growing faster domestically than even that of mobile phones.
There are now 20 states, plus the District of Columbia, which allow marijuana use for either recreational or medical purposes. Of those, California is both the oldest if not largest, with current sales projected at over $1 billion in 2014. Colorado's and later this year Washington's markets are expanding drastically thanks to initiated or planned legalization of recreational as well as medical sales and use. At least eight -- and as many as twelve -- other states are expected to follow suite in the next four to five years.
That said, smooth sailing is all but ruled out by most industry experts while the stratospheric growth potential of the space is taken as a given.
The projections strategy used in the report "is conservative" said Chris Walsh, publisher, in a statement. The figures are based on sales figures from existing states and include estimates for the expected four to five states that may legalize either medical and or recreational use soon. The figures by MBD do not include per Walsh, "wholesale cannabis sales, or the billions of dollars in ancillary cannabusiness revenues such as growing equipment, real estate, legal fees, testing labs, paraphernalia, etc."
MBD's overall view of the market is very similar to other forecasts including ArcView Market Research. In its second edition of The State of Legal Marijuana Markets report, Arcview estimates that the national market is projected to grow 68% this year with a projected market value of over $2.5 billion. Five year national projections estimate as much as a 700% market growth with a potential value over $10 billion.
By far the state with the highest overall sales is California. Over $1 billion worth of marijuana was sold legally last year alone solely for medicinal use.
Gains nationally, as estimated by both industry reports, are driven in no small part by the opening of new state markets and increased market expansion as marijuana becomes legal for recreational as well as medicinal use.
Many analysts who are beginning to study the young but blossoming market, mention the difficulty of forecasting an economy that is still so close to the edge of legality. The uncertainty of state legislative approval is just one issue clouding more accurate projections. Regulation, unification of markets, and consolidation are other outstanding and hard to predict variables. The question of changing the federal classification of marijuana is still a benchmark that few will predict with any accuracy although increasingly seen as possible within a decade by most.