How much did Americans spend on marijuana in 2019? Quite a lot, it turns out!
According to the 2020 Marijuana Business Factbook, cannabis consumers in the U.S. plunked down between $10.6 billion to $13 billion on weed last year. The data, published through Marijuana Business Daily, means marijuana sales now exceed the current annual revenue of the National Basketball Association.
Other lucrative industries are also on track to be overtaken by cannabis sales. For example, last year’s profits from legal cannabis sales topped the totals for “sleep aids, hard seltzer, and toothpaste combined,” according to MBD.
The outlet’s analysis also suggests that yet another thriving economic sector may soon see its numbers eclipsed by Mary Jane. MBD’s projects that, by 2024, Americans might be spending more every year on marijuana than on craft beer.
In order to understand what’s driving this data, one must take a bird’s eye view of the American cannabis industry.
Lacking federal support, a cabal of state-led efforts to legalize (or decriminalize) are ushering in this moment. What we’re now seeing is larger and larger swathes of the country “defecting” from the law as defined in the Controlled Substances Act by creating new cannabis policies. Even if a vast majority of the profits are coming from but a handful of states — looking at you, California and Colorado — the momentum has undeniably grown beyond the obvious candidates.
Newly formed medical marijuana markets in more conservative states like Florida and Oklahoma serve to underscore the reality that cannabis is no longer a partisan issue. As MBD points out, these newer medical markets have also helped to fill the deficit left by states like Illinois, Michigan, and Massachusetts. As those states opened recreational markets, sales from new medical states have helped to keep overall figures on track.
Soon, they may explode even further.
“MMJ sales in Florida and Oklahoma are expected to surpass $1 billion each by 2021,” MBD reports, “placing them among the most valuable and rapidly growing cannabis markets in the United States — medical or recreational.”
In addition to states with nascent cannabis markets, the bigger players are also poised to amplify their sale figures. Standing in their path are pending revisions to banking and tax rules which, if successfully implemented, would have immediate and lucrative results.
In California, for example, a lowered tax rate would almost assuredly correlate with a drastic spike in legal sales. Last year, the state’s black market netted roughly $8.7 billion — more than double the amount business generated from legal sales in California, as the L.A. Times pointed out.
Price point is but one of several factors in play.
There’s also a noted lack of access to local, legal cannabis dispensaries for around 70% of Californians. As a battle over whether marijuana delivery services are allowed to serve jurisdictions that have banned retail cannabis businesses continues to play out in court, the situation has proved fertile ground for illegal marijuana sales to prosper.
Taken all together, the compass is pointing to profits expanding as tax rates potentially decrease and efforts to eradicate unregulated operators from the market gain momentum.
Trends in the industry may also play a heavy role in dictating just how high sales can go. If the infused drink category can find a footing similar to the recent explosion in popularity enjoyed by White Claw and hard seltzer revolution? Look out.
Trying to project precisely how the cannabis industry will next evolve seems palpably foolish in the midst of pandemic, but there are still at least a few lessons to be gleamed.
For one, the enduring popularity of pot as a favored companion through times both good and bad might as well be written in stone at this point. Point proven. For another, can sales figures possibly do what decades of activism and mountains of scientific data have yet to achieve?
As many Americans turn to martinis or 12-packs as a means of enduring the purgatory of sheltering-in-place, we now know they’re also relying on cannabis concentrates and THC-rich edibles as well.
Will the growing acceptance and popularity of cannabis in the U.S. be enough to force a change at the federal level? Elected officials with the power to change things have largely been loath to do the marijuana industry any favors, but hey, money is one hell of a drug.