The U.S. cannabis industry is booming, and it’s showing no signs of slowing down. Since becoming legalized for medical use in 33 states and recreational use in 10 states, cannabis has become one of the fastest-growing industries in the United States.
The rise of the cannabis industry has created countless opportunities for entrepreneurs, who have invested in growing facilities, distribution centers, and retail stores. It has also made a significant impact on the U.S. economy, contributing to new jobs and state tax revenues.
Economic Impact of Cannabis Could Reach $77 Billion in 2022
In 2017, Marijuana Business Factbook, a publication by Marijuana Business Daily, estimated the economic impact of the legal U.S. cannabis industry to be between $20 billion and $23 billion. By 2022, that number could reach as high as $77 billion—roughly equivalent to the GDP of both West Virginia and Idaho, and higher than the GDP of nine states including Delaware and North Dakota.
Also in 2017, legal cannabis sales in the U.S. topped sales of long-standing retail staples like Oreos. The estimated total demand for cannabis in the United States is approximately $50 billion, which is higher than the $36 billion estimated demand for video games.
Investors poured $10 billion into the North American cannabis market in 2018, which represents a significant leap from previous years. Local and state governments are predicted to benefit from the booming cannabis industry as well; by 2030, some experts believe the industry will generate $17.5 billion in tax revenue.
California Is The World’s Largest Cannabis Industry
California alone represents roughly 34% of legal cannabis sales in the United States, with sales within the state reaching $3.1 billion in 2019. By 2022 that number is predicted to jump to $5 billion, with the potential to create nearly $10 billion in total economic impact.
Currently, the illegal cannabis market in California is even larger; experts estimate that nearly $9 billion was spent on the state’s black market in 2019. As new regulations make it even easier for legitimate operations to set up shop, a shift will likely occur from illegal to legal sales—creating a massive economic opportunity for growers and distributors in California.
The Cannabis Job Market Is Booming
According to New Frontier Data, the United States cannabis industry employed at least 250,000 people in 2018. By comparison, the U.S. coal mining industry employed 52,000 people in the same year. That means the cannabis industry employs five times as many Americans as coal, one of the country’s longtime staple industries.
Some experts have predicted that by 2022, the number of jobs in the cannabis industry could climb to 330,000—more than the 268,000 Americans employed by steel and iron mills.
Additionally, the median salary for jobs in the cannabis industry is approximately 10% higher than the median salary for U.S. workers as a whole; $58,111 vs $52,863 in 2018, respectively.
Demographics of Cannabis Consumers Are Shifting
According to Headset, a cannabis industry data intelligence firm, since states first began legalizing recreational cannabis use, Millenials have made up the majority of legal sales—approximately 52%. Generation X makes up a quarter of the remaining sales, with the other generations (Baby Boomers, the Silent Generation, and Generation Z) making up the final quarter combined.
However, this data may change rapidly in the coming years as members of Generation Z come of legal age. Between 2018 and 2019 alone, their share of the market doubled from 3% to 6%. Within the next 10 to 15 years, the cannabis Market could be almost entirely dominated by Millenials and Gen Z.
Public opinions regarding the legalization of cannabis are shifting as well. According to a Pew Research survey, 62% of Americans believe cannabis use should be legalized. As of January 2020, there were more than 900 cannabis-related bills moving through state legislatures and Congress. Changes in legislation will open many new opportunities for cannabis growers and distributors in the United States.
Whether you are interested in investing in the cannabis industry or starting a commercial cannabis operation, there is no denying that these statistics are highly promising.
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