The cannabis stock market has remained incredibly lucrative for those who have gotten in thus far, but the future continues to look bright for the industry. New data has come out showing that the market has a long way to go, but growth is very much occurring in the space today.
The data, coming from New Frontier Data, states that the legal cannabis market in North America reached as much as $6.6 billion back in 2016, with recreational sales accounting for a little less than a third of that amount. The other 71 percent of market share goes to that of medicinal cannabis. But this number has been changing as more and more states begin to put in legislation to allow recreational cannabis for their citizens.
Cannabis Culture’s Jodie Emery stated recently that “legalization is supposed to accomplish three goals: to stop criminalizing people for pot (when it’s nonviolent, peaceful people); to stop criminalizing the existing industry, and to stop spending law enforcement money on marijuana law enforcement.” Another expert in the industry, Scott Greiper, President of Viridian Capital Advisors, stated that “One of the more unique dynamics of the cannabis industry is that it’s a very large cottage industry — by Bloomberg measures, $40 billion to $50 billion in annual cannabis consumption in the U.S.” He further states that there will be a movement toward industrial producers of cannabis in the near future that will outpace all older methods of growing in the past.
Sales of legal cannabis in the country are growing annually at a rate of 16%, which could mean as much as $24 billion by the year 2025. The long-term effect of this if the U.S. is able to legalize cannabis from a nationwide standpoint could mean as much as $100 billion in value overall. Tom Adams, ArcView Market Research’s editor in chief stated that “I’ve covered a long series of entrepreneur-started, rapidly growing industries, from home video and cable television to the internet, and I have seen only one other industry that has the growth prospects that cannabis has, and that was the broadband Internet industry.” The fact that many businesses in the legal cannabis industry are so new, means that they will likely be around as they are prepared for the future of the market.
Tyler Stratford, the director of client operations for cannabis consulting firm Canna Advisors stated that “the industry is at about 5% of what it will be someday. Even if the path forward isn’t straight, we’re certainly on a path forward. The tide has changed, and there’s no turning it back now.” The upside potential for the market remains extremely positive as the industry is still working to catch up to the high pre-existing demand for cannabis. The market also consists of many other ancillary markets that have been created and proliferated through the legalization of cannabis. These markets such as packaging, legal and more, are also blossoming as new laws begin to be put in place.
The cannabis industry is still very much in its infant stages which means that there is still a large amount of potential to go. As the cannabis stock market is able to mature throughout the near future, the hopes are high that more and more investors will be driven into the space to help the continuation of growth throughout it. Only time will tell how a series of new legislation will impact the future of the cannabis market and the ancillary markets that are helping to support it.
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