How much marijuana was sold in 2016? A lot!
While some activists are planning to give away marijuana on Inauguration Day, other entrepreneurs are taking a different approach: making a ton of money from it.
According to Governing.com, 29 states and the District of Columbia have or will soon have laws legalizing marijuana in some form. Use of recreational marijuana is legal in eight states. As its popularity has grown, so have profits. In 2016, sales of legal marijuana in North America totaled $6.7 billion–an increase of more than 30 percent–according to a report from Arcview Market Research. The number is projected to rise to $20.2 billion by 2021.
Debra Borchardt, who covers retail and cannabis for Forbes, contends that the growth is larger and faster than even the dot-com era and also quoted Arcview’s editor-in-chief who said “the only consumer industry categories I’ve seen reach $5 billion in annual spending and then post anything like 25 percent compound annual growth in the next five years are cable television (19%) in the 1990’s and the broadband internet (29%) in the 2000’s.”
Regulatory resistance, particularly at the federal level, is waning. Jeff Sessions, the potential attorney general, is opposed to cannabis, but has other fish to fry. Recently Sen. Elizabeth Warren (D-Mass.) asked the federal Financial Crimes Enforcement Network for additional guidance to help banks serve the growing number of marijuana merchants (many banks have been reluctant to serve this industry due to existing federal statutes).
Growth is being fueled by the rising popularity of marijuana-infused concentrates and edibles. But what’s not included in these numbers are the billions being generated by indirect industries that are also profiting from the cannabis boom, including those that sell accessories, machinery and equipment, pesticides and real state. Let’s not also forget the lawyers and lobbyists who are battling to spread legalization throughout the country. Investments, particularly in testing and growing technologies are “pouring in” said Arcview’s CEO in the Forbes article. “Twenty-one percent of the total U.S. population now live in legal adult use markets,” said Dayton.
For entrepreneurs, investors and opportunists, the marijuana industry could be a new dot-com boom.