New Frontier, a Washington, D.C. and Denver, CO-based research firm recently unveiled a report projecting some interesting growth projections for the legal marijuana market.
Regardless of your opinions on the subject, their findings are hard to ignore.
The firm estimates the market at a current value of $7.2 billion, but potentially reaching over $24 billion within the next three years- with a near even split between sales of medical and recreational marijuana products.
New Frontier bases these projections on trends from the 28 states (and the District of Columbia) where medical marijuana is allowed, as well as the 7 states where recreational cannabis is legal. Furthermore, New Frontier is projecting that the industry workforce could nearly double to 300,000 workers in the growing, production, distribution and sales of related products.
One reason for the optimism is a recent ruling from the 9th Circuit Court of Appeals, which includes California, that the federal government may not prosecute those who grow and distribute medical marijuana in compliance with state laws.
It’s hoped that this ruling will set a legal precedent throughout the industry and counteract the continued classification of marijuana by the Drug Enforcement Agency as a schedule 1 drug.
However, before you start ripping out those machining centers and replacing assembly cells with growing lights, consider the following.
First, more than half of that market value emanates from three states – California, Colorado and Washington – all of which also permit recreational use. And while these states benefit from related tourism dollars, the prescription and use of cannabis is simply not as strong in the remaining states.
Furthermore, of the remaining 22 states that have yet to legalize marijuana, 14 are considered especially tough targets. As not only have they been historically conservative on the subject, but unlike most that have legalized marijuana, these states lack an initiative and referendum process regarding state laws.
This means that citizens can’t put a topic on the ballot – it has to be placed there by lawmakers. Lawmakers who, again, have not been cannabis-friendly.