The recreational marijuana market in Colorado and Washington could be substantially larger than initial predictions, with the local customer pool alone hitting a combined 3.1 million in the two states.
A new poll found that 26% of Americans said they would purchase marijuana at least on rare occasions if it were legal in their state. Based on that finding, there would be 1.8 million potential customers in Washington and 1.3 million in Colorado – not including out-of-state visitors.
That’s significantly higher than some initial estimates of the market size.
One study predicted there would be 363,000 in-state marijuana users in Washington, or approximately 5% of the population, leading to gross sales of $1 billion. That dollar figure relied on a consumption estimate of approximately 85 million grams per year and a per-gram price of $12.
Similar numbers (around 300,000 consumers and a $1 billion market) have been floated in Colorado.
The Marijuana Business Factbook, released last spring by Medical Marijuana Business Daily, estimated total sales of around $500 million in each state as the programs get up and running, eventually hitting $1 billion when the industry matures.
But if a quarter of the residents in each state buy cannabis – coupled with a higher-than-expected number of tourists visiting to buy and use marijuana – those numbers could come in much higher.
Taking that a big step further, the national customer base for marijuana could hit 82 million if cannabis is legalized across the country. The market could therefore surge well past an initial estimate of $46 billion.
By comparison, U.S. alcoholic beverage sales were an estimated $115 billion per year, based off of a 2003 study by the Economic Research Service of the U.S. Department of Agriculture.
The poll discovered that the cannabis business could siphon off some sales from the alcohol industry, something marijuana proponents have long claimed.. Roughly 11% of respondents said they would buy marijuana more often than alcohol if cannabis were legal in their state, compared with 20% that would purchase more alcohol than marijuana.
While the poll presents encouraging signs for the recreational cannabis market, there are some caveats. The vast majority of those who said they would buy cannabis indicated they would do so somewhat infrequently. The poll found that 12% would buy it “rarely,” and 10% would purchase it “sometimes.” Just 4% would buy cannabis “often.”
Those are broad and highly subjective terms. “Rarely” to one consumer might mean once a month, while to another it could mean once a year.
So the actual consumption rate is very difficult to gauge. Also, the price of cannabis is expected to drop – possibly significantly – once the recreational industry takes root, which could limit revenue. And it’s unclear how much the recreational market will eat into the existing medical marijuana industry.
The Huffington Post survey polled 1,000 U.S. adults using a sample from YouGov, an online polling website.
The poll shed light on various aspects of consumers’ attitudes toward marijuana, including possible buying frequency. Nearly 20% said they would purchase marijuana more frequently if it were legal, while 15% said they would buy cannabis more often than cigarettes, vs. 12% who would buy cigarettes more often than cannabis.