Report: Cannabis Industry Can’t Stop, Won’t Stop

A new report finds the multi-billion dollar cannabis industry may really be too high to fail.

New financial analytics from a heavy hitter in the world of cannabis capital finds that even if Trump cracks down on the industry, the profit margins are simply too high to fail.


According to a new report, even if the Trump administration were to crackdown on the cannabis industry nationwide, he would not be able to curtail the projected expansion of safe access: the legal cannabis market is projected to reach a value of  $22.6 Billion in five years.

The report, released by mega-cannavestor firm The Arcview Group and data researcher BDS Analytics, found legal consumer spending across North America grew 34 percent to $6.7 billion in 2016. Even with the threat of a crackdown, it can be expected to grow at a 27 percent compound annual growth rate over the next five years — meaning the $6.7 billion in 2016 will be $22.6 billion in 2021.

Troy Dayton, CEO of Arcview Market Research, said other than a minor disruption, federal interference would hardly be a blip on the spreadsheet for big cannabusiness.

“While the uncertainty created by the mixed signals coming out of the Administration may cause a temporary dip in some valuations of cannabis companies and some more risk-averse institutional investors and multinational companies may continue to stay on the sidelines, it won’t impact the growth of the market much at all,” Dayton said. “No matter what the administration does, states will continue to issue cannabis licenses to a long line of applicants and licensed cannabis outlets will continue to have long lines of consumers ready to purchase this product from regulated establishments.”

The numbers also showed, despite another year of mega-growth in the industry and taking cash, the taxman is still missing out in plenty of places.

North Americans spent $56.1 billion on legal and illicit cannabis products in 2016 —  about half of the $105 billion they spent on beer. But only $6.7 billion of that was spent legally and 87 percent of that came from just five states and Canada.

In addition, 63 percent of Americans can legally obtain cannabis with a doctor’s recommendation and successful ballot initiatives in California, Massachusetts, Nevada and Maine more than tripled the number of Americans that will be able to purchase cannabis without a doctor’s recommendation in their home state to 21 percent.

The growth of branded product subcategories, such as vape cartridges, edibles and other alternative consumption methods, play the biggest factor in the continued rapid growth of the sector. The report noted that, in the relatively mature Colorado market, there are now hundreds of branded products on shelves: the top five brands accounted for nearly half of all edible sales, the top 10 brands for more than two-thirds and the top 20 for almost 90 percent.

Sales of dried cannabis flower still accounted for more than half of all cannabis product sales in 2016 in Colorado, Oregon and Washington.

“The explosion in the number of brands and products is dizzying,” said Arcview Editor-in-Chief Tom Adams. “When the #1 concentrate brand in CO grows 84 percent but its market share percentage remains constant it becomes clear we are in a remarkable business boom. It reminds me of 1998, when Google was just one of dozens of search engines, or 1988 when Blockbuster was just one of dozens of video store chains; future market leaders are just now being launched.”

Across the board, dry flower sales have continued to grow at a fast pace with the price per gram continuing to drop.

Even more popular is letting somebody else spin it up for you before you even buy it — pre-rolled joint sales went up 63 percent in Colorado, 318 percent in Washington and 236 percent in Oregon; the growth of concentrates and edible products were similarly well-above the growth of flower in all three states.

TELL US, what’s your favorite way to buy and use cannabis?

Jimi Devine has been involved in cannabis reform since 2005 and has worked in the Berkeley cannabis industry since 2009 when he moved to California from Lynn, Massachusetts. Currently serving as Staff Writer here at Cannabis Now, you can also find his writings on cannabis products and policy in the San Francisco Chronicle, The Boston Globe, The Hill, The Chronicle of High Education, GreenState.com, Marijuana.com, 7x7 Magazine, and in Ed Rosenthal's most recent book This Bud's for You. Jimi has a BA in Journalism and Media Studies from Franklin Pierce University.

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