U.S. consumers will spend somewhere between $5 billion and $6 billion on legal marijuana in 2017, according to a new report released this month. By 2021, that number could reach a staggering $17 billion.
The numbers come courtesy of the Marijuana Business Factbook 2017, issued in May by editorial and research staff at Marijuana Business Daily. The report is based on an online survey of more than 800 people working in the cannabis business and, if anything, is shaded toward the conservative side.
“It’s important to note that we are somewhat conservative with our estimates and projections, both for the existing industry and its potential growth going forward,” the reports executive summary states. “We strive to provide realistic numbers, not make the industry appear bigger than it really is.”
Almost As Popular as Frozen Pizza
The report, which also used information on retail transactions and wholesale cannabis pricing from Headset and Cannabis Benchmarks, offered a variety of interesting facts about marijuana sales.
For example, the total amount spent in 2016 on both recreational and legal marijuana ($4 to $4.5 billion) is more than the amount spent on:
- Erectile dysfunction drugs Viagra and Cialis
- Paid music streaming services
- Girl Scout cookies
In 2017, it could surpass sales of Doritos, Cheetos, Funyuns, frozen pizza and ice cream, according to the report.
Other interesting numbers.
The report also offered projections on the economic impact of cannabis, as well as other issues. The numbers included the following:
- Legal marijuana had an economic impact of $16 billion to $18 billion in 2016, a number that could rise to $68 billion by 2021
- The number of people working in the cannabis industry – somewhere around 200,000 – is more than those employed as massage therapists, bakers and dental hygienists.
- The average marijuana business has a profit margin of about 19 percent
- The average number of customers per day at a recreational marijuana shop is 119
The report indicated that an area of concern for cannabis professionals is the stance on legal marijuana by the Trump Administration.
Attorney General Jeff Sessions has repeatedly attacked both the legal sale of marijuana and the benefits of marijuana itself. There is concern about federal intervention in states where marijuana is legal, the report states.
On the positive side, the number and size of individual investments in the cannabis industry is growing. While large institutional investors have steered clear because of the status of marijuana as an illegal drug under federal law, smaller investors have picked up the pace in cannabis investment.