US cannabis market to reach $26B by 2025, study says
Federal legalization of medical and adult-use cannabis will create $86 billion in additional U.S. tax revenue and a $26 billion annual U.S. cannabis market by 2025, according to a report released Jan. 29.
New Frontier Data, which compiles business metrics for the global cannabis industry, issued economic data detailing the potential impact of federal cannabis regulation on key industry sectors in the United States. The report, released during a presentation with Congressmen Earl Blumenauer, D-Oregon, and Lou Correa, D-California, at the National Press Club in Washington, D.C. Also presenting at the briefing by New Frontier Data and The Liason Group were cannabis testing lab Steep Hill and U.S. tax firm CohnReznick.
Currently, 33 U.S. states have legalized cannabis to varying degrees. Another 14 have approved use of products with the nonhallucinogenic compound cannabidiol (CBD).
“Cannabis legalization and decriminalization has not only occurred in nearly 60 percent of the United States; it is now being explored or adopted in over 60 nations around the world," said Giadha Aguirre de Carcer, founder and CEO of New Frontier Data, in a statement. "Our data shows full federal legalization, specifically in the U.S., will drive material gains across key economic sectors, including federal revenue generation, national job creation, and reduced government healthcare spending and crime rates. Our ultimate goal is to provide U.S. Congress objective and comprehensive intelligence on the potential socio-economic impact of federal cannabis legalization as its members enter into this delicate debate.”
Here are highlights from the report, titled "State of the Cannabis Union":
— There are an estimated 272 million cannabis consumers globally, equivalent to 4 percent of the world’s population.
— These consumers collectively spend approximately $356 billion each year on cannabis across legal and illicit markets.
— In the United States, over 24 million, or 9.9 percent of adults age 18-plus consume cannabis regularly, and 115 million (48.2 percent) report consuming it in their lifetimes.
— In states where cannabis is currently legal, medical and adult use sales are forecast to grow from $12.9 billion in 2019 to $26.3 billion in 2025.
— Federal legalization would create $86 billion in U.S. tax revenue between 2019 and 2025 on $253 billion in sales over that period.
— Government pain medication spending drops 11 percent in U.S. medical cannabis markets versus non-legal markets.
— There were 2.4 million U.S. medical marijuana patients in 2018, up 71 percent from 2014.
— The U.S. hemp market is projected to grow to $5.7 billion annually by 2020.
— Legal cannabis supported 259,000 plant-touching jobs in 2018.
— The share of sales for cannabis flower products fell from 66 percent in 2015 to 40 percent last year, while sales of concentrates grew to 39 percent from 16 percent in that time.
New Frontier Data and research partner MJ Freeway surveyed over 3,100 cannabis consumers nationwide on use of cannabis, spending behavior, purchasing decisions and thinking on how marijuana should be regulated.
Blumenauer and Correa spoke on the regulatory roadmap for advancing federal cannabis policy at the National Press Club briefing, according to New Frontier Data. Steep Hill, the world’s first commercial independent cannabis testing laboratory, briefed lawmakers and attendees on regulatory guidelines to ensure ethical and honest testing to protect public health. CohnReznick gave an overview of the tax structure necessary to support revenue generation of efforts.