Nearly seven months have passed since the Green Wave of the 2020 election jumpstarted legalization of cannabis in multiple states across the United States, and with legalization comes market growth.
Data from Marijuana Business Daily’s 2021 Annual Marijuana Business Factbook puts the growth potential of the cannabis industry over the next several years into perspective. Of course, new regulations could change things again and again in the coming years, but the data shows the future looks bright for cannabis sales, business growth, patient access, and job growth.
Cannabis Sales Growth
According to the data in the 2021 Annual Marijuana Business Factbook, U.S. cannabis sales will climb to $48.4 billion in 2021 – a 31% increase over 2020 sales ($36.9 billion). The majority of sales (54.55%) will happen in the adult-use market ($26.4 billion) with the medical market not far behind ($22 billion). In 2020, the same ratio in sales happened with 54.20% of sales going to recreational consumers.
Growth is expected to continue well beyond 2021. In 2025, Marijuana Business Daily projects legal U.S. cannabis sales could hit $84.3 billion with $45.9 billion of those sales (54.45%) happening in the adult use market.
To put those numbers into perspective, cannabis sales in the United States would surpass sales in the craft beer industry by as much as $20 billion ($27.28 billion in sales for the craft beer industry in 2025 vs. $45.9 billion for the legal cannabis industry).
It’s safe to assume that cannabis sales will be driven by a handful of key states in the coming years. Based on estimated 2021 sales from the 2021 Annual Marijuana Business Factbook, the states with the highest legal cannabis sales this year will account for 28% of overall sales in the country:
- California: Up to $5.7 billion
- Colorado: Up to $2.5 billion
- Illinois: Up to $1.9 billion
- Massachusetts: Up to $1.7 billion
- Washington State: Up to $1.7 billion
On the flip side, the five states with medical and/or recreational cannabis markets that are expected to have the lowest sales in 2021and account for just 1.6% of overall sales in the country are:
- Iowa: Up to $6 million
- North Dakota: Up to $13 million
- Vermont: Up to $14 million
- Washington, DC: Up to $21 million
- Virginia: Up to $25 million
With new adult-use programs opening in states like New York and New Jersey in the coming years, it will be interesting to see how these numbers continue to evolve. Of course, regulations play a significant role in how large a state’s market can actually get, but with large population centers, the sales leaderboard is likely to change very soon.
Cannabis Economy Growth
The cannabis industry has had a significant impact on the U.S. economy in recent years, and that effect will grow in the next few years. Marijuana Business Daily reports the total economic impact of the industry in 2020 was as much as $70 billion, and the impact is expected to increase by 31% to as much as $92.4 billion in 2021. Fast-forward to 2025 and the projected economic impact of the cannabis industry on the U.S. economy is expected to jump to $160.7 billion.
An important part of this economic growth comes through the large number of jobs that the legal cannabis industry brings to the country. It’s estimated that cannabis businesses employed as many as 415,000 full-time workers in 2021, and that number will climb to 670,000 in 2025. To put that number into perspective, more people work in the cannabis industry in 2021 than there are firefighters (335,000 in 2020) in the U.S.
The cannabis industry is also responsible for enabling people to open businesses. The data shows there are an estimated 73,650 businesses operating in and with the cannabis industry. Of those businesses, as many as 44,000 provide ancillary products and services while up to 29,650 are plant-touching businesses.
Key Takeaways about the Future of the Cannabis Industry
There is no doubt that the cannabis industry will grow in the coming years. The questions that remain are how fast and how much will it grow, and which states will have the most significant growth? One thing everyone can agree on is that this is an industry filled with opportunities that is having a measurable, positive impact on the U.S. economy.
Cannabiz Media will be tracking all of this growth and updating the data in the Cannabiz Media License Database every day. If you’d like to tap into the opportunities the growing U.S. cannabis market has to offer, schedule a demo and see how you can grow your business as a Cannabiz Media License Database subscriber!