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A new report by a New York investment bank estimates that the U.S. marijuana market could be worth $50 billion in 10 years if cannabis were to be made federally legal.
America’s legal cannabis industry could swell to $50 billion in the next decade, according to a new report from mainstream investment bank Cowen & Co. The current market is estimated at $6 billion, which means the forecast, developed by 10 analysts at the New York bank, expects it to grow more than eight times its present size over the 10-year period.
“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,” the Cowen analysts said.
The 110-page forecast does presume that the United States’ federal government will legalize adult use and medical marijuana. As of now, 25 states have adopted medicinal cannabis legislation and four states – Colorado, Oregon, Washington and Alaska — have passed recreational marijuana laws, and nine states have qualified marijuana initiatives on their respective ballots this November.
“Cannabis prohibition has been in place for 80-plus years, but the tides are clearly turning,” the Cowen analysts told Bloomberg News.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_single_image image=”17691″ img_size=”1200×200″ onclick=”custom_link” link=”https://www.medicalmarijuanainc.com/voters-nine-states-will-weigh-marijuana-initiatives-november/”][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]Among the nine states that will be voting on recreational marijuana initiatives this fall is California, which already has a medical marijuana program valued at $2.76 billion. If its Proposition 64 passes, California’s legal marijuana market could balloon to an estimated $6.46 billion by the year 2020, according to a report published earlier this year. The state would have an estimated $1.6 billion in recreational sales in its first year of legalization alone. The Cowen report estimates an 80 percent chance of passage of Proposition 64 and believes legalization in California would triple the value of the nationwide market on its own.
Although it was just recently that the Drug Enforcement Administration refused to reschedule cannabis under the Controlled Substances Act, public support for adult use and medical marijuana legalization is at its highest in over a century. This summer, a Quinnipiac University poll found that 54 percent of registered voters voiced support for the legalization of adult use marijuana, and 89 percent responded in approval of medical marijuana legislation. Another survey found that a majority of American adults believe the costs associated with enforcing marijuana prohibition are higher than the benefit they provide.
“With more cannabis dispensaries in CO than Starbucks, assuming full legalization, we estimate there could be as many as ~17,000 legal cannabis retailers in the U.S., upon full legalization,” the report reads.
The Cowen group expects that following federal legalization, black market sales would shrink as they transitioned into legal market sales. Plus, the group believes that with legalization, marijuana would become even more socially acceptable and would lead to more overall use among Americans. Marijuana use by American adults has already surged over recent years as legalization has expanded throughout the country. Use was shown to double in the 10 years between 2001-02 and 2012-13 and a recent poll found that nearly 33 million currently use marijuana.
You can learn more about current U.S. cannabis laws on our education page. Keep up with the latest cannabis legalization developments by visiting our news page.[/vc_column_text][/vc_column][/vc_row]
