How high can the cannabis industry grow?
An end to cannabis prohibition would create a massive industry almost overnight
Changing US and Canadian laws and softening consumer sentiment is taking cannabis from street corners to Wall Street – with analysts predicting recreational cannabis could be a $50 bn industry by 2026 in the US alone.
Investors are moving to capitalize on the burgeoning North American cannabis market. Cowen & Co, led by managing director Vivien Azer, held a US investor conference on cannabis earlier this year, with more than 150 people in attendance.
‘For the recreational and medical (non-pharma) market, we think in its legal form it’s about $6 bn,’ Azer says in a video on Cowen & Co’s website. ‘But there’s a massive black market, given that 32 mn consumers use cannabis every year in the US. We think the current market is $30 bn today and we think it’s going to get to $50 bn by 2026, assuming federal deregulation.’
These numbers are backed up by Ackrell Capital, which predicts that recreational cannabis will be a $50 bn industry in the US 10 years after legalization, in addition to the US pharmaceutical cannabis industry growing to $50 bn.
Comparison between cannabis consumption and other stimulants in the US
Consumer monthly spending
||$45 to $200||$80 to $100||$40 to $80||$50 to $500|
US retail market size
||$200 bn||$35 bn||$100 bn||$100 bn|
Source: Ackrell Capital