By Phillip Smith
The American marijuana industry should hit $25 billion in sales by 2025, according to the latest estimate by the industry analytics firm New Frontier Data. That would put pot in the same league as such well-established industries as radio, video games, children’s toys, and the market research industry.
The research firm released updated data on industry sales projections on Friday as a teaser for its “US Cannabis Report: 2018 Industry Outlook,” due to be released next month.
New Frontier estimated the size of the industry this year at $8.3 billion and predicted that the recreational and medical marijuana industry will grow at a compounded annual rate of 14.7%, creating a $25 billion market within the next seven years.
Recreational marijuana will account for the bulk of the increase, New Frontier said. While medical marijuana sales are expected to increase at a compound annual rate of 11.8%, recreational sales are projected to go up by 18.4%. At those rates, by 2025, the recreational and medical marijuana markets will be the same size.
“Across the globe, we have seen massive expansion as more than 50 countries are legalizing or decriminalizing cannabis. However, the United States continues to lead the way in cannabis consumption in legal medical and adult use markets. With a number of states expected to advance cannabis legalization measures in the next 24 months, more Americans will be able to access legal cannabis in the years to come,” Giadha Aguirre De Carcer, New Frontier Data’s chief executive officer said in a statement.
Notably, the analysis is based only on growth in those states that have already legalized medical and/or recreational use and does not assume that any other states will do so. That means $25 billion is probably a low-ball figure, given that a number of other states are likely to legalize recreational use before 2025.
Buds have become big business, indeed, and are destined to get even bigger.