Weed sales to outpace candy. Unless we get the munchies.
As we predicted years ago, the legalization of marijuana has led to an explosion of sales and tax revenue, but exactly how big are these sales?
A new study by GreenWave Advisors indicates that by 2020, legal cannabis sales could hit $35 billion by 2020 if marijuana is legalized at a federal level. This “comprehensive research and financial analysis” of the burgeoning industry claims to represent revenues in the first year of national legalization.
The $35 billion mark is instantly put into perspective by comparing the cannabis industry to others like the NFL whose annual revenue (currently $10 billion) and the candy industry which is currently $34 billion annually. Whaaat?
Why this young industry is unpredictable
Despite the flawed logic (more marijuana sales mean more candy sales, but whatever), GreenWave reports that there are multiple types of markets that lead to their conclusion, namely medical and recreational, both of which are growing radically. More states will likely legalize marijuana by 2020, even if it isn’t legalized on a federal level. The GreenWave report assumes that fully 12 states (plus D.C.) will legalize by then, and that 37 states will have medical marijuana legalization.
Even without being made legal nationwide, they still project sales will hit $21 billion in the next five years.
Although there is clear growth in this market, predicting a number of this nature for such a young industry is complex – just ask Colorado who has failed to accurately project marijuana tax revenues thus far. There’s a lot of unpredictability so far and much uncertainty hangs on who sits in the Oval Office for the next presidential term, as well as DEA raids on dispensaries, making investors squeamish about the risk of unannounced and unexplained raids.
