Thanks to changing laws and regulations, the cannabis industry is thriving and is expected to hit the $20 billion mark in the next five years, according to a report by DS Analytics and Arcview Market Research. This figure is more than what the NY-based bank Cowen & Co. estimated in its report released a few months ago.
The bank estimates the cannabis market to be worth $15 billion mark by 2025. The new report is said to be more reliable as it includes the latest figures and takes into account a variety of products including pharmaceuticals.
What The Report Says
The report expects the general cannabis market that consists of smoke shops, pharmacies, grocery stores, and cafes to grow exponentially in the next few years.
This prediction makes a lot of sense since a large number of states have made cannabis legal for medical or recreational purposes. Cannabis is fast becoming a part of the social market. But, we can't discount other channels.
Here are some stats highlighted in the report:
- About 66% of CBD consumers in the country believe that cannabis should be fully legalized. Moreover, about 90% of these users believe that cannabis has some great medical benefits.
- A large number of people buy CBD products from dispensaries, causing CBD sales in dispensaries to have outgrown other products.
- Most CBD consumers are highly educated, have a job, and are above 40 years of age.
How the Research Was Performed
The company’s VP, Jessica Lukas, talked about the process in detail. She said:
“We had to look at the landscape today, and then assess and predict where the cannabis market will go. THC and CBD are very different with different functionality. Product forms that make sense and are very successful for THC do not necessarily transfer to CBD. Additionally, we had to strongly consider the interaction between the general market channels and the dispensary channel in assessing whether or not the availability of CBD products in the general market is incremental to purchases in dispensaries, will replace dispensary purchases, and/or will drive greater penetration and acceptance of legal cannabis.”
The company had to face several challenges during the process, especially in regard to estimating the cannabis market in terms of category and channel. Since most products sold are not tracked, it can be difficult to get the right figures for research purposes.
Still, she expects other categories including beauty, beverages, skin, candy, and food to generate a good amount of revenue for the industry.
“While dispensaries and ecommerce drive the majority of cannabinoid sales today in the U.S, this shifts versus the next five years,” she concluded.
What Does This Mean for the Cannabis Industry?
If we go by the report, we will see a major shift in how the industry functions. Some distribution channels may grow more with cannabis being used more extensively around the country.
Reports suggest that the industry is also helping the economy. There was a growth of 76% in cannabis jobs in 2019 and more jobs will open in the future thanks to the growing market.
The industry is expected to hire 330,000 more people by 2022, slightly more than steel and iron mills in the country. People are interested in such jobs as the salary is 10% higher than the average pay in the US.
If more industries legalize cannabis, we may say the cannabis market reach unprecedented heights.