Retail sales of medical and recreational cannabis in the United States are on pace to eclipse $12 billion by the end of 2019 – an increase of roughly 35% over 2018 – and could rise as high as $30 billion by 2023.
That’s according to exclusive projections from the 2019 edition of the Marijuana Business Factbook.
Continued sales gains in recreational markets as well as the rapid development of medical marijuana programs in newly legalized states will spur much of that growth over the coming year.
In 2019, new medical markets, including Florida, Maryland, Ohio, Oklahoma and Pennsylvania, saw strong patient demand, broad lists of qualifying conditions and adequate access to dispensaries propel sales beyond initial expectations.
Although medical sales are projected to increase at the same rate as recreational sales in 2019, growth on the medical side of the industry is expected to slow significantly over the long term.
The two largest medical markets in the nation – California and Michigan – will likely see precipitous declines in MMJ sales as rec programs in both states get off the ground. The third-largest medical market – Arizona – is poised to pass adult-use legalization via a ballot initiative in 2020.
Furthermore, only a handful of states remain where medical use is not legal, and many of those – including South Dakota, Wisconsin and Wyoming – have expressed little to no interest in changing that.
As such, the potential for new medical marijuana states coming online and boosting overall sales is beginning to dry up.
On the recreational side, estimated sales in 2018 were revised up slightly from our original forecast at the beginning of 2018.
California’s massive new adult-use industry got off to a slow start, as high taxes, local licensing restrictions and a cumbersome bureaucracy made it difficult for licensed businesses to compete with the state’s entrenched black- and gray-market operators.
But by the end of 2018, the number of licensed retail stores and delivery services in California was up considerably, pushing estimated sales past the $2 billion mark.
Sales in mature markets such as Colorado, Oregon and Washington state continue to grow, although the pace of that growth has slowed. By the end of 2019, each of those states could post single-digit, year-over-year sales gains – the first time that’s happened in a recreational marijuana market.
Nationwide, however, rec sales are set for major growth in the coming years, as California and Massachusetts are expected to hit their strides by 2020 and markets such as Maine and Michigan come online.
By 2023, we project total retail marijuana sales in the United States will reach between $25 billion and $30 billion annually – more than a threefold increase from estimated annual sales in 2018.
Purchase your copy of the Annual Marijuana Business Factbook at mjbizdaily.com/factbook or call us directly at (720) 213-5992, ext 1.
Eli McVey can be reached at email@example.com