Growth and Outlook in the Cannabis Industry
Posted by Marijuana Doctors on 02/13/2018 in Economics
Updated on August 21, 2018. Medical content reviewed by Dr. Richard Koffler, MD, Board Certified Physiatrist
Thanks to new laws and attitudes, the cannabis industry is growing rapidly. Predictions estimated the cannabis market would be worth $7.9 billion by the end of 2017. By the end of 2025, that estimate jumps to $24 billion.
By the end of 2020, the cannabis industry is projected to create over a quarter million jobs in the United States. Additionally, more and more states are legalizing recreational and medical marijuana.
Here’s brief outlook of the cannabis industry’s projected growth.
Current Market Statistics and Projected Growth
From 2016-2017 the cannabis market thrived. By the end of 2017:
- Medical marijuana became legal in Washington D.C. and 29 states.
- Eight states along with Washington D.C. legalized recreational marijuana.
- On average, a medical cannabis user spends $136 on marijuana every 10 days.
- Recreational weed users spend $49 on marijuana every 14 days.
- The sales of legal marijuana increased by 33% over 2016.
According to New Frontier Data, a company that performs marijuana market research, those numbers will only go up from there. By 2025, they predict:
- Medical marijuana sales will jump from $5.32 billion to $13.22 billion.
- The recreational cannabis industry will grow from $2.65 billion to $10.86 billion.
- Marijuana sales will total over $24 billion.
The projected outlook of the cannabis industry assumes no additional states legalize medical or recreational marijuana. However, New Frontier Data shows increasingly positive public attitudes. For example:
- 86% of the population believes cannabis has valid medical uses.
- 55% of Americans believe cannabis should be legalized, taxed and regulated much like cigarettes.
- Of the remaining 45%, 26% believe that cannabis should be medically legal with a doctor’s prescription.
- Only 9% of the population believes cannabis should be illegal.
Combined, these market statistics emphasize that cannabis is a thriving industry with a positive future outlook. However, there are still some challenges.
Banking, the Cannabis Industry and Financial Uncertainty
In 2016, only 300 American banks and credit unions provided financial services to the cannabis industry. Since 2017, that number only increased by 68. That means only about 3% of U.S. financial institutions cater to marijuana-based businesses.
Federal regulations are the root of this issue. Financial institutions are required to:
- Monitor the cannabis industry’s commercial activities
- File quarterly reports concerning suspicious activities by any marijuana business they serve
Because of this, most banks and credit unions refuse to serve the cannabis industry.
Advertising Restrictions Impact the Cannabis Industry’s Growth
Even with the legalization of marijuana in various states, the federal government still considers weed to be a Schedule 1 drug. This means there are federal restrictions on where and how the cannabis industry can advertise their products. Some major restrictions include:
- No radio advertising
- Heavy regulations for email, print media and public ads
- No advertising products that market to minors or glamorize marijuana
As a result, the internet is still the best advertising platform for the growing cannabis industry. Creating a dedicated site for your marijuana business is recommended. Additionally, working with others in the pot industry can help advertise your business and promote your products.
The Economic Benefits of Legal Marijuana
Despite financial and marketing difficulties, the cannabis industry’s economic outlook is optimistic. New Frontier Data shows that legalizing weed generates tax revenue and creates new jobs. The report on growth in the cannabis industry outlines the following:
- In 2017, the total tax revenues generated by medical and recreational marijuana was $745 million.
- That revenue is predicted to reach $2.3 billion in 2020.
- If medical marijuana was legalized across America, it could potentially save taxpayers $220 million in Medicaid expenses for opioid prescriptions.
- By 2020, the cannabis industry has the potential to create over 280,000 new jobs through direct, indirect and induced means.
As the cannabis industry grows, the economic benefits increase. Nevertheless, before joining the industry, it’s important to understand the career opportunities available.
Marijuana is not legal everywhere in the United States. Because of this, individuals seeking to become a part of the cannabis industry’s growth might need to move to a different state. Since the majority of cannabis careers exist in the retail and administration sectors, it’s important to find a state with storefront opportunities.
Those looking to join the cannabis industry should keep in mind the following:
- The Best States: Colorado and California have more open licensing laws. Denver has more cannabis dispensaries than Starbucks. California also recently legalized recreational cannabis businesses, which allows for weed and pot based dispensaries, restaurants and cafes.
- The Worst States: Minnesota and New York are two of the worst states for opening a cannabis business. Minnesota allows a maximum of eight dispensaries in the state while New York has harsh licensing regulations. This makes licensing competitive.
As the cannabis industry expands, so have opportunities for women and minorities.
Recent studies showed:
- In the marijuana industry, the number of women executives is slightly higher than the national average.
- About 17% of cannabis executives are minorities, 5% of which are female minorities.
- 30% of cannabis companies are owned completely by women
- 57% of cannabis companies are half owned by women
Joining the Cannabis Industry
Thanks to changing attitudes and laws, the cannabis industry is growing quickly. Recent studies only highlight its positive future outlook. Despite issues in the financial and marketing sectors, the numbers emphasize that the opportunities for medical and recreational marijuana will only increase.
Whether you’re looking to start your own business or begin working in a dispensary, the career opportunities are there. MarijuanaDoctors.com has the information you need to begin your journey. Find your local dispensaries or get in touch with us to learn more about how to start your own business and join the fastest-growing industry in the U.S.