The marijuana economy is booming and could hit $44 million by 2020 if current trends continue. The business of legal cannabis is projected to surpass medical marijuana revenue in the next two years.
In an annual report on the U.S. cannabis industry, website Marijuana Business Daily predicts that legal marijuana will bring in $44 million in revenue by 2020. Last year’s report predicted a $14 to $17 billion impact for this year.
The impact figure is different from sales of cannabis because it represents sales as well as all the money pumped into the economy because of direct sales. The figure includes everything from wholesale growers and grow-light manufacturers to marijuana accoutrements and everything touched by the trickle-down effect of the industry. The figure even includes home purchases made in places like Colorado, where legal recreational use has attracted new residents.
According to MBD, recreational marijuana sales are expected to be between $1.4 billion and $1.7 billion in 2016. Sales could climb to $2.6-$3.8 billion by 2018. While medical marijuana sales are also expected to grow, that industry is expected to see $2.3-$4.0 billion by 2018.
The total cannabis market in the United States, including illegal sales, is estimated at $40-$45 billion, outpacing craft beer, wine, and organic food.
While sales are important, the residual effects of this income is felt in other ways. Marijuana Business Daily notes that the marijuana economy has an economic multiplier of 4, meaning that every dollar spent on legal cannabis leads to another $3 trickling into the economy.
MBD managing editor Chris Walsh notes that the main places seeing growth in the industry are Colorado, Oregon, and Washington. He added, “And also, interestingly, even the mature medical marijuana markets are growing very quickly, like Arizona, New Mexico, and state that have had medical programs for years now.” Walsh noted that new medical marijuana states are also seeing growth.
Federal law still prohibits marijuana, making it difficult for marijuana businesses to get bank accounts. If that were to change, Walsh and Marijuana Business Daily predict that the marijuana economy will grow at an even faster rate.