June 15, 2023 12:00 pm ETEstimated Read Time: 5 Minutes
Over the years, cannabis has been labeled as an illicit substance, and its use has been criminalized. However, the narratives have been changing since it was first legalized for recreational use in 2012 in Washington and Colorado. Many people have begun to take a subjective look at marijuana and its vital contribution to the medical field and economic growth.
The result is that more states in the U.S. have legalized it. As of November 2022, 21 states have legalized adult-use sales of cannabis, with 37 states allowing it for medical reasons.
The contribution of cannabis in increasing tax revenues, providing job growth, and great investment opportunities has turned the U.S. economy over for good—and recent reports have revealed that the cannabis market is poised to grow to $50.7 billion in adult-use sales by 2028.
Cannabis Sales Continue to Help the Economy
According to the U.S. Cannabis Market Forecast report released on Feb. 16, 2023, by the Brightfield Group, the sale of cannabis will not be going down any time soon. Based on the release, cannabis sales will hit an annual value of $31.8 billion by the end of this year and an estimated annual sales of $50.7 billion in the next five years.
In 2022, the combined annual sales of cannabis experienced a decline compared with the previous year as mature marijuana markets like Arizona and Colorado recorded a dip in sales. Matt Zahner, the insight manager at Brightfield Group, explained that 2022 was a turning point for the cannabis industry. Six states in total began adult-use sales, with four out of these launching sales in the second half of the year.
There are speculations that the 2022 decline is a result of the pandemic. It was explained that cannabis sales probably increased in 2021 because users had more disposable income to spend on it. However, the return to more social activities like going to the bar, visiting a restaurant, or going on a vacation has probably reduced the money spent on pot. This speculation goes on to explain that if these claims are true, it just shows that people have returned to “more normal consumption patterns.”
Cannabis Markets Across the Nation
Newly legalized markets are expected to grow substantially in 2023, especially in populous states like New York and New Jersey. New York started sales at the end of 2022, so 2023 is its first proper market year. Connecticut and Missouri began theirs in the first two months of 2023. Growth is also projected to be tremendous in states like Maryland too. Nonetheless, the Maine and Michigan cannabis market is currently experiencing steady growth.
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Brightfield Group has explained that the eastern part of the United States seems to be on the path to being a multi-state center for cannabis. This is because seven states on the East Coast have legalized adult-use sales, while nine states allow medical cannabis.
Adult-use marijuana sales from the West Coast states, especially Washington and Colorado, are expected to hit $11.5 billion by the end of this year and $15.3 billion in 2028. Moreso, the adult-use sales recently launched in Arizona and New Mexico will contribute greatly to the projected figures. However, the sale of medical cannabis is set to shrink from $2.3 billion as of 2022 to about $2 billion by 2028.
In the midwest, explosive growth is in view now that sales have started in Missouri. Although adult-use cannabis is not yet legal in Ohio or Minnesota, it is anticipated to be approved in the coming years.
On the other end, the Southern part of the U.S. is highly likely to contribute the least to the growth of adult-use sales of marijuana. This is because the region is primarily focused on the sales of medical cannabis.
Brightfield further analyzed the popularity of different cannabis products in 2022 and found that flower leads in sales, valuing up to $11.6 billion. Vape products are next with about $5.9 billion in sales, while infused beverages sold up to $290 million.
Many more market reports have further revealed that the increasing demand for psychedelic drugs will immensely impact cannabis sales. Market research from Brandessence published in January showed that the global market of psychedelic drugs like ketamine, LSD, MDMA, and psilocybin would reach about $.87 billion in 2022 and $11.82 in 2029. The key companies in the industry are trying to take advantage of the competitive market. And they have taken active steps like product launches, partnerships, collaborations, mergers & acquisitions to have an edge.
Brandessence market research mentioned that “the rising prevalence of depression and other mental disorders worldwide and increasing demand for treatment, are the key factors supplementing the growth of the psychedelic drugs market.” Also, it explains that “Furthermore, changes in lifestyle and the desire for a higher and better quality of life are expected to contribute toward the market growth. And also increase in R&D initiatives in the sector of psychedelic medicine is projected to drive market expansion during the forecast period.”
Mary Ekundayo is a passionate cannabis writer and entrepreneur with a love for all things literary. When she's not creating content, you can find Mary lost in the pages of a captivating book or meditating to set the tone for her day.
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