New Frontier Data has released “The U.S. Cannabis Report 2019 Industry Outlook,” showing a significant future for the nation’s cannabis industry.
Legal sales in the U.S. cannabis market are projected to exceed expectations by 2025, according to a new report released by the independent research firm New Frontier Data.
“Annual sales from currently legal state markets are collectively projected to grow at a compound annual growth rate (CAGR) of 16%, to reach more than $29 billion by 2025,” the new “U.S. Cannabis Report: 2019 Industry Outlook” report states.
The data shown from legal cannabis market shows an upward trend in medical marijuana sales from $4.6 billion in 2017 to $6 billion by the close of 2019. For recreational marijuana sales, the report’s data shows an increase from $3.3 billion in 2017 to $7.6 billion by the close of 2019.
New Frontier Data also projects that by the end of 2019, regulated recreational and medical cannabis sales will reach $13.6 billion. Despite marijuana being illegal at the federal level, marijuana is legal in one form or another in 47 states.
Regional Cannabis Use Increase
Back in 2017, New Frontier Data predicted a lower number of sales, $24 billion by 2025. The newest data suggests that because of expanded legalization and a shift in views on cannabis, the sales are on the rise even faster than anticipated.
“The industry expansion is fueled by convergent forces, including: the addition of new legal markets as more states reform their cannabis laws, sustained growth in demand in legal states as consumers make the transition from the unregulated market to the legal one, and greater diversification of cannabis use for medical and wellness uses based on growing scientific affirmation of cannabis’ expansive therapeutic value,” the authors report.
The report highlights two states with the biggest increase in recreational-use sales, Maine and Maryland. The two states experienced an average of 14 percent rise in consumer use annually over the last five years.
Utah, a state that currently holds some of the country’s strictest cannabis laws, surprisingly saw reported monthly cannabis usage rates nearly double since 2010 (from 3.3 percent to 6.5 percent). The report’s authors note the increase could be due to the state’s location next to Colorado, and the neighboring legal market’s influence on local cannabis perception and consumption.
New Frontier Data projects that California, Washington, Colorado, Florida, Michigan, Oregon, and Massachusetts will be the largest state markets for legal marijuana by 2020.
Strong Illegal Cannabis Market Stands
While projecting an overall annual decline in illicit cannabis sales, the New Frontier Data market research report anticipates the illicit cannabis market will hold strong, especially in states with no legalization. The report’s authors noted that “the illicit market will serve the majority of national demand since most consumers still live in either medical-only markets or states with no legalized cannabis.”
The report highlights Texas, North Carolina, and Georgia, which currently represent the three largest unregulated state markets. According to the report, the states combined totaled $7.8 billion in estimated annual illicit sales in 2018.
If they take no actions to legalize and regulate any form of cannabis use, “the illicit market in those three states collectively are projected to be worth roughly $8.3 billion by 2020, rising to an estimated $9.4 billion by 2025,” the report’s authors wrote.
In those states where cannabis has become legal in some form, data shows a decline in illicit marijuana sales. New Frontier Data projects an estimated $7 billion decline in annual illegal market sales between 2018 and 2025.
Find the full 2019 New Frontier Data report, here.
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