Marijuana is legal for adult use in two states and available to medical patients in nearly half the country, and legal sales generated over $2 billion in 2014. But a regulated pot industry could unltimately generate $45 billion annually if marijuana were legalized nationally, according to an industry study published earlier this month.
Marijuana Business Media surveyed over 1,000 cannabis businesses and investors across the country for the 2015 edition of its Marijuana Business Factbook — an extensive annual report on the legal pot industry. As a result of that survey, MBM is predicting that the legal pot industry could produce $8 billion in sales by 2018 — a year later than it previously forecast — depending on states' legalization efforts. But the slower growth doesn't seem to be Colorado's fault: According to this state's Marijuana Enforcement Division, regulated marijuana brought in $47,082,298 in total taxes in 2014 — an 857.9 percent increase from the year before, thanks to recreational legalization.
The revised market prediction has more to do with politics than with demand. The opening date for Washington's regulated adult-use businesses was delayed thanks to months of legislative confusion; city governments in California (the nation's largest pot market, according to the study) have closed medical dispensaries while advocates fight for legalization; and Alaska and Washington, D.C — both of which legalized recreational use earlier this year — have yet to provide regulations for potential cannabis businesses. The lack of banking and financial support because of marijuana's Schedule 1 status, a hurdle well documented in Colorado, is another significant barrier.
Factbook editor Chris Walsh says his group took these issues into account when issuing its conservative projection. “Given the delays we’ve seen in many markets, and the unknowns tied to which states will actually legalize MMJ or recreational going forward, I feel very comfortable with these projections," Walsh said in a press release accompanying the study. "The industry continues to grow faster than expected and is seeing exceptional potential for business growth as more and more states continue to legalize.”
With Arizona, California, Massachusetts, Missouri and Nevada potentially voting on recreational legalization in 2016, the legal pot market could soon expand. But with the proliferation of retail dispensaries in Washington and Colorado alone, the Factbook predicts that recreational dispensaries will tie their medical counterparts in revenue in three years and surpass them by 2019. For pot shops in Colorado, this is simply a matter of finances: Being a medical-only dispensary cuts off a larger share of recreational customers, and becoming a dual-license dispensary not only brings more regulations, but can require renovations to separate medical and recreational bud bars.
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"We've gone rec-only, but still offer discounts to medical patients," explains an employee at L'Eagle Services, a Denver dispensary. "It saves us money, we're still in compliance, and our former patients don't have to pay higher prices."
One testament to the strength of the legal cannabis industry is how much money is going into it: Last year, more equity firms invested in legal marijuana than ever before. But there's still some hesitancy; according to the Factbook, over 75 percent of the mistakes made by pot businesses seeking funding were related to poor preparation and lack of experience.
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