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

Adult penetration
50% 50% 17% 20%
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