Home Economy Data Shows Where the Real Cannabis Opportunities are in the United States

Data Shows Where the Real Cannabis Opportunities are in the United States

by Team Marijuana News

The cannabis industry is filled with business opportunities across the United States, but identifying the best areas to focus your time and investments can be challenging. With the data in New Frontier Data’s The Global Cannabis Report – Growth and Trends Through 2025, you can get a clearer picture of where growth is happening today and in the foreseeable future.

Based on the data, the opportunities look really good. Globally, legal cannabis sales are on track to hit $29.4 billion in 2021, and that number is projected to climb to $51.0 billion in 2025.

According to the report authors, North America is the epicenter of the global cannabis economy. In fact, it accounts for 97% of current legal demand for cannabis products. As a result, the authors predict that North America – with its “foundation of legal markets, capitalization strategies, and cultivation best practices” – will lead the way in “product innovation and social-use experiences” for years to come.

Bottom-line, all eyes are on opportunities in the United States.

The State of Cannabis Sales in the United States Today

Of the 268 million people globally who consumed cannabis at least once in 2020, New Frontier Data reports that 44.6 million of them were located in the United States. In fact, for every 1,000 consumers in the United States (population 330 million), 135 of them are already cannabis consumers.

That means with just 13.5% of the population already buying cannabis products, there is still a lot of room for growth – both within states where some form of high-THC cannabis is already legal and in states that haven’t legalized any form of cannabis yet.

In 2021, 236 million U.S. consumers live in a state with legal access to some form of high-THC cannabis. Do the math and you’ll discover that 18.5% of consumers in those states are cannabis consumers. Again, there is a large existing market and a lot of room for growth.

What does all of this population and consumer data translate to in terms of sales?

The Global Cannabis Report says legal domestic sales of cannabis reached $25.1 billion in the United States during 2020 ($13.6 billion in legal adult-use sales and $11.5 billion in legal medical sales) and sales are expected to climb to $43.5 billion in 2025 ($28.2 billion in legal adult-use sales and $15.3 billion in legal medical sales).

U.S. Cannabis Market Opportunities

There are three market growth opportunities for businesses to consider based on the data from The Global Cannabis Report: current markets, new markets, and the black market. Let’s take a closer look at each one.

Opportunities in Current Markets

There are significant growth opportunities in states across the U.S. that have already legalized medical and/or adult-use cannabis. As mentioned earlier in this article, penetration into existing markets is still below 20%.

As more consumers become more comfortable with cannabis and as more consumers get better access to legal cannabis products in terms of price and availability/convenience, the penetration rate will increase.

In 2020, the top 10 largest legal medical and adult-use combined state markets account for 80% of all legal cannabis sales:

  • California = 26%
  • Colorado = 11%
  • Washington State = 7%
  • Florida = 6%
  • Arizona = 5%
  • Pennsylvania = 5%
  • Illinois = 5%
  • Oregon = 5%
  • Massachusetts = 5%
  • Michigan = 5%
  • All other states combined = 20%

Things get even more interesting when you consider what the future cannabis market landscape will look like. As states like New York and Illinois ramp up their adult-use programs in the coming years, the breakdown will change significantly. New Frontier Data projects the top 10 largest markets in 2025 will account for 71% of legal cannabis sales:

  • California = 16%
  • New York = 8%
  • Illinois = 8%
  • Florida = 8%
  • Michigan = 7%
  • Colorado = 5%
  • Massachusetts = 5%
  • New Jersey = 5%
  • Pennsylvania = 5%
  • Arizona = 5%
  • All other states combined = 29%

Looking at these projections for sales gives you a good idea of where the biggest opportunities for growth are likely to be between now and the end of 2025.

Opportunities in New Markets

Many states are considering expanding their medical cannabis programs, legalizing cannabis for medical use for the first time, and/or legalizing adult-use cannabis. New Frontier Data expects that Alabama, Georgia, Idaho, Kansas, Kentucky, Nebraska, North Carolina, South Carolina, Tennessee, and Texas are the states to watch with a total projected cannabis consumer population for all of these states combined at 8.4 million.

An estimated cannabis consumer population of 8.3 million is available in states that New Frontier Data expects will legalize adult-use cannabis in the near future. The seven states identified as potential new legal adult-use markets are Florida, Maryland, Minnesota, New Hampshire, Ohio, Pennsylvania, and Rhode Island.

In total, the 16.7 million projected cannabis consumers in these potential new markets could be the key to rapid growth for investors and businesses within the next several years. The reason is simple. The report authors explain that legalizing in these states would bring the percentage of Americans living in states with high-THC medical and/or adult-use legal cannabis access to 96%, and the percentage of Americans living in legal adult-use states to 60%.

When nearly two-thirds of the country’s residents live in legal adult-use cannabis states, there will be far more pressure for federal legalization and even more opportunities will be created.

Opportunities from the Black Market

Total trackable U.S. cannabis spending in 2020 reached $86.2 billion, which means a sizeable portion of sales are still going to the black market across the country. The good news is this shows there is growth potential among existing black market consumers, but the bad news is many things need to change in order to lure them to the legal market.

The biggest piece of the puzzle is federal legalization. Until cannabis is legalized at the federal level, people won’t have adequate access to it, and it won’t be normalized socially. Furthermore, regulations will need to change to make legal cannabis more affordable than what consumers can buy on the black market.

Key Takeaways about the Real Cannabis Opportunities in the United States

The massive consumer spending potential that comes with the legal cannabis market cannot be ignored. Today, opportunities are available based on growth projections for current markets and new markets as well as the potential to convert existing consumers from the black market to the legal market. There is no better time than now to pursue a cannabis business growth opportunity because the future looks very bright.

The post Data Shows Where the Real Cannabis Opportunities are in the United States appeared first on Cannabis Business Executive – Cannabis and Marijuana industry news.

This post was originally published on this site

Related Posts