On a hot summer day, nothing beats cannabis and ice cream. But when paired against each other, which one do people want more?
According to a report published by Marijuana Biz Daily, the US market demands more cannabis than the cold desert, reaching between $45 billion and $50 billion – including the black market.
By comparison, ice cream sales top out at $5.1 billion. It is important to highlight that ice cream sales have steadily increased this year by 6.5 percent, so people aren’t exactly eating less of the sweet treat. Other comparisons include movie sales ($11.1 billion) and chips, such as Doritos, Cheetos and Funyuns, which caps at $4.9 billion.
The forecast for cannabis sales looks bright, as the authors of the report predict a 33.3 percent increase over last year’s sales of $4 billion – $4.5 billion. From a long-term perspective, analysts see sales reaching $17 billion per year by 2021. California and Colorado are the main drivers for growth during this period.
California alone could contribute up to $5 billion in recreational sales in the next four years – an impressive 76 percent share of the total revenue prediction for recreational sales.
“On the recreational side of the business, the originally legalized states are still posting massive growth,” said Chris Walsh, editorial head of MMJ Business Daily. “The demand for marijuana is so enormous in this country.”
This year also marks another unique milestone for the thriving industry: recreational sales are forecasted to dethrone medical sales for the first time. Currently, there are eight states with recreational cannabis laws in effect, which will make up an estimated $2.6 billion – $2.9 billion in sales. Medicinal cannabis, with more states able to contribute to such sales, is expected to max out at $2.5 billion – $3.2 billion.
Both recreational and medical cannabis establishments benefit from an average profit margin of 19 percent.
These healthy figures are supported by the amount of jobs created by the industry. The report shows that there are up to 230,000 professionals working full or part-time. That’s significantly more workers, compared to bakers, dental hygienists or massage therapists in the country.
To cater to the surge in demand for cannabis, around half (50 percent) of businesses that are generating revenue are expected to participate in or launch fundraising campaigns. This group is made up of companies that need monetary support to expand their business and companies that need money to float them over until they are able to turn in profits. Interestingly, the largest bulk of cannabis-related businesses that are looking for funds in 2017 include laboratories (for testing) and manufacturers that specialize in infused products.
“The business opportunities that will emerge in the coming years are tremendous for both existing marijuana companies and new ones that start up,”
States with legal cannabis laws are in a position to directly benefit from the booming industry. The report explains that the estimated monetary ratio of consumer spending at cannabis stores to economic benefits generated by local government is $1:3.