2016 was a great year for marijuana in the United States. Not only did more states legalize the herb for medical and recreational use but those states also saw significant increase in revenue and job creation.
Sales of marijuana grew 30% in 2016 and financial experts are predicting that marijuana sales will reach $20 billion by 2020. In other words, the green gold rush is real.
Cannabis sales are projected to grow at a compound annual rate of 25%, from $6.7 billion in 2016 to $20.2 billion by 2021, according to Arcview Market Research. The company will release a more detailed report in February.
Arcview’s forecast uses research from BDS Analytics, a cannabis business intelligence and market research firm, and incorporates marijuana-usage data from the National Institute on Drug Abuse. It also analyzes the growing acceptance of marijuana state by state and how future potential legalization in other states may impact the market. The forecast looks at how the Colorado, Oregon and Washington markets have matured and at Canada, which is pushing for nationwide legalization in 2017.
“No estimation of the size of the legal cannabis industry is complete without recognizing the new massive role Canada’s market will play as it moves toward legalizing adult use,” said Arcview Editor in Chief Tom Adams in a statement.
“The only consumer industry categories I’ve seen reach $5 billion in annual spending and then post anything like 25% compound annual growth in the next five years are cable television in the ’90s and broadband internet in the 2000s,” he added.
Some following the industry expect the market might be even bigger. Analysts at Cowen Washington Research Group wrote in September that legal marijuana could be a $50 billion industry in the U.S. by 2026. That estimate assumes that recreational use will be legal nationwide by then.
Other industry experts have suggested that national legalization may be four to eight years away.