In spite of the ongoing pandemic, marijuana sales in the U.S. are on track to hit a staggering $15 billion by the end of 2020—a 40% growth over 2019 sales. This report comes from the recently released exclusive marijuana projections by MJBizDaily Annual Marijuana Business Factbook.
Marijuana sales have seemingly been unaffected by the pandemic—some think because of how many people are at home rather than in an office. For example, in Illinois residents spent $84 million on marijuana in March as compared to $65 million in the previous month. In California, sales of marijuana in March increased by 159% as compared to March of the previous year. It's interesting to note that a similar pattern was witnessed in Europe where demand for cannabis increased.
Retail marijuana sales in the U.S. are predicted to hit $37 billion by 2023. However, there will be ramifications from the pandemic on the marijuana industry as well. With people having less purchasing power it will be interesting to see how this ultimately affects the industry. With the economic stimulus package supporting tens of millions of unemployed U.S. residents left for the Senate to vote on, things appear to be on the brink. However, it may swing either way for the industry, at least in the short term.
Both the recreational and medicinal marijuana markets witnessed immense growth in the last couple of months. New markets for medical marijuana opened up in Florida, Maryland, Pennsylvania, and Oklahoma. Illinois, Massachusetts, and Michigan are now offering adult-use marijuana. Over 8% of residents of Oklahoma are registered as medical marijuana patients. Together, Florida and Oklahoma are expected to rake in $1 billion in retail sales of marijuana by the end of 2021. This will put them both on the map as among the most vibrant medical marijuana markets on a global scale.
The recreational market is also strong. Colorado and Washington are showing great potential especially with increasing demand for marijuana among Gen-Z. Also, the legal recreational market in these states is giving the black market a run for its money. Were price difference not an issue there would have been a clear winner. Unfortunately the black market thrives on selling dirt cheap because it has no quality measures or licensing to pay. Illinois' legal marijuana recreational market is gradually growing. Sales are expected to hit $2 billion by the end of 2024. The recreational market in California has underperformed expectations possibly due to the rigid regulatory framework. However this might change as marijuana businesses adapt to the regulatory framework.
State-by-State Marijuana Landscape in 2020
As of June 2020, 33 states in the U.S. plus the District of Columbia legalized marijuana for medicinal use. Eleven states had also legalized adult-use (recreational) marijuana. However, marijuana remains illegal under federal law because it is classified as a schedule 1 drug. To this end, marijuana is illegal in all federal enclaves such as airports, even when the particular state has legalized marijuana. Additionally, some Indian tribes have their own marijuana laws that are different from the laws set by the states where they are located.
In 2020, some states were considered highly likely to legalize marijuana. They include Arizona, New Mexico, New Jersey, Florida, and New Jersey. However, it's not clear the likelihood of these efforts now.
Here are some of the marijuana reforms that have happened since the beginning of the year:
Alabama: The Senate judiciary committee approved a medicinal cannabis bill SB165
Connecticut: Bills to legalize recreational marijuana were introduced to the senate
Kentucky: Bill HB136 to legalize medical marijuana was passed by the House judiciary in February
Minnesota: Bill HF 4632 was introduced to the House to legalize recreational marijuana and expunge records for cannabis related convictions
New Hampshire: Bill SB 420 was passed in the Senate in February to allow medical marijuana patients to cultivate their own cannabis at home. Bill 1648 was approved to allow adults to cultivate up to six marijuana plants in their residence and to possess up to ¾ ounce of marijuana.
New Jersey: Bill S2535 was introduced in the Senate to decriminalize possession of up to 16 ounces of marijuana.
New Mexico: Bill SB115 was introduced to the House to push for legalization of recreational marijuana
South Dakota: HB1008 was passed to legalize the cultivation of hemp
Tennessee: SB1849 passed to legalize possession of half ounce or less of marijuana
Virginia: House Bill 972 was passed to decriminalize possession of half an ounce or less of marijuana. The bill was signed into law on May 21.
There is a lot that is happening in the marijuana space and these are clear indications that the dark era of prohibition is coming to an end. It is even more exciting to learn that marijuana sales are on track to hit $15 billion by the end of 2020.
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