A mainstream investment bank predicts in a new report the U.S. cannabis industry may balloon to $50 billion over the next decade, more than eight times its current size and reflecting federal legalization of marijuana and a shrinkage of the black market.
The report from Cowen & Co. is notable for its prediction as well as the fact that it comes from a New York investment bank founded nearly a century ago, in 1918.
The public forecast from a mainstream firm gives the cannabis industry an added boost in legitimacy and credibility. Up to 10 states could be voting on legalizing medical or recreational marijuana this fall.
According to Bloomberg News, Cowen’s forecast assumes the federal government will legalize marijuana. “Cannabis prohibition has been in place for 80-plus years, but the tides are clearly turning,” the firm’s analysts said in their report. They put the size of the current legal MJ market at $6 billion.
“A 24 percent, 10-year revenue compound annual growth rate is hard to find in consumer staples, in particular one with a $50-plus billion end-point,” Cowen said, according to Bloomberg.
Late last year, Merrill Lynch, the investment banking arm of Bank of America, reportedly issued a relatively rosy 45-page report about cannabis that includes basic information about cannabis, its benefits for several medical conditions, an outline of state medical marijuana laws, and results of public surveys about cannabis.