America’s legal cannabis market is growing faster than the dot-com surge of 2000, according to a recent report from Forbes. Citing the findings of a study by ArcView Market Research, the business news publication says that the cannabis industry has grown by 30% in the last year, ballooning to nationwide sales of $6.7 billion.
The ArcView report projects that the US market will continue its fast-pace rise, reaching $20.2 billion by 2021 by growing at an unprecedented rate of 25%, surpassing the 22% gross domestic product growth rate achieved by the dot-com boom.
“The only consumer industry categories I’ve seen reach $5 billion in annual spending and then post anything like 25% compound annual growth in the next five years are cable television (19%) in the 1990s and the broadband internet (29%) in the 2000s,” ArcView’s editor-in-chief Tom Adams said in the Forbes report.
For its 200-page market research report, slated for publication in February, ArcView utilized data from its partner BDS Analytics, which captures individual transactions from dispensary point-of-sale systems. The report found that consumers have become more interested in non-smokable products.
“One of the biggest stories was the alternative forms of ingestion,” ArcView Chief Executive Officer Troy Dayton told Forbes. “Concentrates and edibles are becoming customer favorites versus traditional smoking.”
Dayton acknowledges the incoming administration has caused there to be some uncertainty in the market, with investors and entrepreneurs wondering whether President-elect Donald Trump will serve to support or obstruct the cannabis industry. Proposed attorney general Jeff Sessions has historically been an opponent to legalization and just recently refused to provide a definitive stance on marijuana enforcement during his confirmation hearings. Dayton believes, however, that cannabis will be a low priority for the administration and claims that Trump has said he’s in favor of states rights when it comes to legalization.
“It’s one of the few things he has been consistent on,” Dayton said.
Dayton told Forbes that he remains optimistic about the market. Investors are putting their money into retail, but also investing in new technology to develop new growing and testing technologies. Last November, voters in California, Massachusetts, Nevada and Maine approved recreational marijuana measures, bringing the nation’s total states with adult use laws to eight.
“Twenty-one percent of the total U.S. population now live in legal adult use markets,” Dayton told Forbes.
Twenty-eight US states have passed comprehensive medical marijuana legislation and lawmakers in several states have already introduced bills for the 2017 session. Pew Research has found that 57 percent of American adults are in favor of legalizing recreational marijuana. Support for medical marijuana legalization has found to be at 89 percent among Americans by Quinnipiac University polling.
“You will not find another growth rate anywhere in the world that is not already filled with multi-national companies and institutional investors,” said Dayton. “That’s part of what makes the cannabis industry such a unique opportunity for investors and entrepreneurs.
The ArcView report also predicts that Canada’s legal cannabis market, expected to come into effect sometime this year, will experience a high growth of sales.
ArcView Market Research, founded in 2011, provides marijuana market size projections. According to Forbes, it has assisted investors in placing $91 million with 135 primarily private legal cannabis companies.
Read the entire report from Forbes here.