California’s recreational marijuana market is likely to make up more than half of the $7 billion to $8 billion new marijuana retail sales that are expected after eight states passed new marijuana measures.
In three to five years, recreational marijuana sales in California could reach $4.5 billion to $5 billion annually, according to estimates provided by Marijuana Business Daily. The cannabis business publication had previously projected that the eight new markets created following the election would account for a combined $7 billion to $8 billion in retail sales, but it wasn’t until a recent appearance at the Marijuana Business Conference & Expo in Las Vegas that editor Chris Walsh provided a breakdown.
“It’s clear – California is going to reclaim its mantle as the capital [of the cannabis trade],” Walsh said during his keynote address.
California was just one of eight states that passed marijuana measures on November 8, but it’s expected to dominate the legal cannabis market. In the first full year of legalization, the California market should pull in $1.6 billion in recreational sales, according to a report published earlier this year by Arcview Market Research and New Frontier.
Taking into account population numbers, social attitudes on marijuana, cost of living, and medical conditions lists, Marijuana Business Daily also made preliminary market projections for the seven other states that passed marijuana measures. Besides California, three states — Maine, Massachusetts and Nevada — passed recreational marijuana measures. Four states — Florida, Arkansas, North Dakota and Montana – approved medical marijuana initiatives.
Marijuana Business Daily projects that the market in Maine, where an adult use marijuana initiative narrowly passed and may undergo a recount, would be worth $250 million to $350 million in sales. Massachusetts, as the most populated of the New England states to have legalized adult use marijuana, is expected to experience an influx of cannabis-interested tourists from nearby states that will help generate sales of $650 million to $750 million. In Nevada, home to one of America’s most tourist cities, retail marijuana sales are projected to reach $450 million to $550 million annually.
“The 2016 election will go down as one of the most defining moments in the history of the marijuana industry and movement,” said Walsh. “This is going to pave the way for billions of dollars in new sales, thousands of business opportunities, potentially several hundred thousand jobs and a wave of innovation in the marijuana industry over the next five years.”
Sales projections for the four new medical marijuana states are more moderate, except for in Florida, a state which Marijuana Business Daily estimates will pull in $600 million to $800 million in sales due to its population and “heavy concentration of seniors.” Arkansas is expected to generate $30 million to $60 million in medical marijuana sales, while North Dakota’s sale estimates are between $10 million and $20 million and Montana’s are projected to be $25 million to $35 million.
The publication’s projections for each state’s market are for three to five years after shops or dispensaries have opened their doors. For recreational marijuana state estimates, the market projections do not include the revenue already generated by established medical cannabis markets. Walsh said that his publication would reexamine and revise the market estimates over time.
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