A report recently showed that legalized marijuana sales are already draining billions of dollars of profit from the black market each year. Each day more and more consumers choose to support their locally taxed and regulated retail outlet instead of an underground dealer. According to the Arcview Market Research report, Cannabis Market Research, Americans and their Canadian fellows spent $53.3 billion total on marijuana in 2016, but only $6.7 billion in the legal North American market. That means there is a lot of room for growth. CEO of Arcview, Troy Dayton stated, “The enormous amount of existing, if illicit, consumer spending sets cannabis apart from most other major consumer-market investment opportunities throughout history.”
Unlike other fast-growing markets, which include home video, mobile, and organic foods, “the cannabis industry doesn’t need to create demand for a new product or innovation, it just needs to move demand for an already widely-popular product into legal channels,” Dayton stated. He said that the sudden popularity of alternative ingestion methods also fueled growth in the legal market. He continued, “Consumers who would never smoke a joint are finding relief in other products, which offer a wide array of tastes, strengths, and experiences.”
With a well-established customer base and its voters giving the green light to bring cannabis out of the closet and over the counter via Prop. 64, California is sure to have a severe impact on the marijuana economy. Dayton stated, “The possibilities of innovation seem endless. Legalizing cannabis in the world’s sixth-largest economy will present great opportunities for cannabis industry participants. Entrepreneurs couldn’t ask for a better time to be part of an untapped market, but now is the time to make a plan if one is to be successful.”
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