Cannabis Emerges A Multibillion-Dollar Industry in Key States
According to an MJ Freeway and New Frontier Data survey, U.S. cannabis sales from consumers 55 years or older increased by 50% since 2015.
NEW YORK CITY – The U.S. cannabis industry is growing at unprecedented rates as efforts to legalize cannabis nationwide draw new consumers to the market each year, becoming a multibillion-dollar industry in key states. With the upped demand, real estate companies and retailers are bulking up their resources to expand their market share, according to an MJ Freeway and New Frontier Data survey.
According to the data, U.S. cannabis sales from consumers 55 years or older increased by 50% since 2015. Well known as baby boomers, this consumer group now accounts for 29% of medical marijuana sales and a quarter of all sales.
The U.S. represents the largest cannabis marketplace because of states such as California and Colorado that have legalized recreational cannabis. And further legalization of marijuana is expected to bolster overall sales within the industry, which is slated to reach $13.6 billion by the end of 2019, increasing over 32% from $10.3 Billion in 2018.
In addition to recreational use, legalized medical and adult-use programs are set to grow at an annual compounded growth rate of 14% by 2025, totaling $30 billion in sales, according to the data report. A total of 33 states have legalized medical programs, and 11 states have legalized adult-use programs.
In states where the sale and use of marijuana are legalized for recreational use, the cannabis industry has become a key revenue generator. For instance, states like California, Colorado, Nevada and Washington have collectively established a multibillion-dollar revenue stream from cannabis legalization.
To meet rising demand, cannabis companies are bulking up on space. Innovative Industrial Properties, a real estate investment trust that operates industrial properties for cannabis purposes on the West coast, bought a facility in Danville, Pennsylvania for $20.3 million. The asset is for cultivating and processing marijuana.
Cresco Labs, a publicly-traded cannabis company based in Chicago, Illi., has recently won the City of Chicago lottery for recreational cannabis dispensary locations. The company won two of the seven available licenses in the Central District, and one of the six available licenses in the Southeast District. Cresco will now have one dual-purpose dispensary in the North District of Chicago, as well as access to open two adult-use dispensaries in the Central District and one in the Southeast District.
As policy tailwinds to legalize marijuana use for medical and recreational purposes become less taboo and more acceptable on a federal level, the industry is expected to continue to grow. Approximately 15% of the U.S. population resides in states where both medical and recreational cannabis use remains illegal, which is expected to change as demand increases and as younger generations age up, according to recent GlobeSt.com article.