North Americans spent almost $7 billion on legal cannabis products in 2016, a 34 percent increase over 2015, according to a new report.
Medical marijuana still drives the largest percentage of sales, but that is expected to change over the course of the next few years, according to Arcview Market Research.
In the executive summary for their “State of Legal Marijuana Markets,” researchers with Arcview present a picture of rapidly growing legal marijuana markets in the United States and Canada.
Related: The Wishful Outlook for Marijuana Jobs in 2017
Residents in both countries spent $5.08 billion on medical marijuana in 2016, up from $4.16 billion in 2015. Recreational, or “adult use,” marijuana sales also jumped from just under a billion in 2015 to $1.7 billion in 2016.
With states approving recreational marijuana, including California and Massachusetts, sale are projected to continue to climb.
“More states passed laws to open new markets and expand existing ones in 2016 than in any previous year,” the report noted. “These new markets will drive sustained revenue growth in the years ahead.”
Related: Meet the Business Leaders Serving in Trump's Administration
A $21 Billion Industry
The report projects cannabis sales will reach more than $21 billion by 2021, with $14.8 billion of that in recreational cannabis sales and $6.7 billion in medical marijuana sales. These projects includes sales in the U.S., Canada and Mexico.
Arcview included Mexico in future projects as the country’s leaders currently are considering a medical marijuana legalization bill.
The projections call for the industry to somewhat settle to a lower growth rate of about 19 percent in 2017 as states that just approved recreational marijuana need the time to set up regulations and rules for the industry. Businesses are not expected to state selling in most states until 2018.
“The blistering 40% compound annual growth rate from 2014 to 2016 was driven primarily by Colorado and Washington initiating adult-use sales,” the report noted. The same kind of growth is expected in 2018 as more states get legal cannabis on line.
Canada Leads the Way
The report singles out Canada as leading the way in North America on creating a legal, well-regulated cannabis industry at the federal level. Prime Minister Justin Trudeau and his Liberal Party have made legalizing marijuana at the national level a priority.
A panel appointed by Trudeau to create regulations around the national legalization of cannabis delivered their report in late 2016. Trudeau has said he expects to present legislation on the issue in the first half of 2017.
Arcview Market Research has positioned itself as among the foremost companies in interpreting analytical data on the sale and distribution of cannabis. The company partners with BDS Analytics, which provides the data sets on point-of-sale marijuana transactions.
Follow dispensaries.com on Instagram to stay up to date on the latest cannabis news.