Getting your arms around the medical marijuana market is no easy task, given the fledgling state of the industry and the fact that some states have a central patient registry and others do not. It’s the equivalent of, say, getting your arms around a giant blob of lime Jell-O, except without the mess.
But we can glean some insight into its size from a recent report by NORML, which estimates that there are between 1 million and 1.5 million patients who have registered for medical marijuana cards under state law. That, according to the organization, represents a market of between $2.3 billion and $6.2 billion annually, “assuming usage of one-half to one gram of cannabis medicine per day per patient and an average retail price of $320 per ounce.” NORML came up with a much higher estimate than the one we wrote about last week by the financial analysis firm See Change Strategy, which pegs the market at about $1.7 billion.
Now don’t go spreading these stats as if they are gospel. This is only a rough estimate, based on some hard data and a heck of a lot of guesswork. And the ranges given are pretty big. It’s one thing if there are 1 million legalized patients and a market of $2.3 billion, while it’s quite another if there are 1.5 million patients representing a $6.2 billion market. That’s a $3.9 billion swing.
Nitpicking aside, the numbers are substantial either way you look at it. Even if you assume that the stats are inflated because an industry group calculated them, it’s still a sizable market. And you must keep in mind that similar information for any industry involves plenty of assumptions. It’s good to see people at least attempting to quantify the market, as this industry suffers from a severe lack of data.
What I find particularly interesting is that California clearly dominates the industry by a wide margin, home to an estimated 70 percent or so of all legalized medical marijuana patients, for a total of 750,000 to 1.1 million. While it’s not surprising that California leads the pack, it’s worth pointing out that No. 2 on the list – Colorado – has just 8-12 percent of all registered patients (123,890), yet the percentage of each state’s population with a card is roughly the same.