Cannabis sales in the U.S. are predicted to surpass $24 billion this year, a growth of 38% compared to 2020, according to BDS Analytics (BDSA), a Colorado-based global cannabis market research firm.
Using dispensary sales and state tax information, the firm predicted the U.S. cannabis market to reach $47.76 billion by 2026, driven by new and emerging markets. Illinois, Massachusetts, and Michigan — three of those “new markets” — each more than doubled cannabis sales in the first half of 2021 compared to the same period in 2020. Connecticut, New Jersey, New York, New Mexico, Virginia, and South Dakota have also all recently legalized cannabis sales, creating potentially equal growth rates.
The growth rate of these newer markets exceeded BDSA’s expectations, according to Kelly Nielsen, VP of insights & analytics, during a BDSA webinar Friday.
“The cannabis industry continues to show exceedingly rapid growth, particularly within the U.S. market,” Nielsen said. “New markets, both medical and adult-use, are developing at a faster pace than observed in the past, and states are transitioning from medical-only to fully legal in a shorter time frame.”
Nielsen emphasized the fastening pace at which states are transitioning from medical use cannabis laws to “adult use” allowances. She pointed to Arizona, which was the fastest market to make the transition from medical cannabis legalization to recreational use regulation.
Nielsen predicted that the medical market will reach its growth peak around 2023, then slowly decline as more states legalize other uses. Medical use cannabis sales in the U.S. are expected to grow from $7.6 billion in 2020 to $10.1 billion in 2021, and $11.2 billion by 2026.
“All of our forecasts make the assumption that some degree of federal legalization is likely to happen in the next year or so, but our expectation is that states will still have the opportunity to regulate cannabis at the state level,” Nielsen added. “The implication there is that we do not expect the market to dramatically change in the short term — even with federal legalization — at least from the consumer perspective.”
Globally, cannabis sales are expected to reach $31 billion this year, a 41% increase from 2020. By 2026, BDSA forecasts sales to reach $62.1 billion — an average of over $5 billion a month.