A new report projects that the American recreational cannabis market will exceed the $50 billion mark by 2028.
Despite the recent decline in sales in certain markets like Arizona and Colorado, the American adult-use marijuana industry is poised for substantial growth in the coming years, according to a ,new report. On February 16th, the Brightfield Group released its “U.S. Cannabis Market Forecast.” The study presents data comparisons from marijuana sales in 2022 and five-year sales projections for the United States between 2023 and 2028.
The newly released forecast predicts annual sales to reach more than $31.8 billion by the end of this year and projects sales to reach $50.7 billion by the end of 2028. According to Brightfield Group Insights Manager Matt Zehner, the positive view on cannabis sales is due mainly to the expansion of the industry into new state markets.
In an interview with ,Forbes, Zehner said, “2022 was a big year for cannabis, with seven state markets beginning sales (six adult-use, one medical), four of which only commenced in the latter half of the year. These markets are expected to have sizable growth over the course of the year, particularly those in populous states such as ,New Jersey and ,New York.”
“2022 was a big year for cannabis, with seven state markets beginning sales (six adult-use, one medical), four of which only commenced in the latter half of the year. These markets are expected to have sizable growth over the course of the year, particularly those in populous states such as New Jersey and New York.”
– Brightfield Group Insights Manager Matt Zehner
Additionally, with states like Maryland anticipating the launch of its adult-use program this year and others like ,Maine and ,Michigan experiencing steady growth in their respective markets, 2023 will be another year of exceptional sales expansion for cannabis.
From a regional perspective, the Group believes the eastern U.S. could become a multi-state hub for marijuana, with nine states operating medical cannabis programs and seven having already legalized recreational marijuana for adults.
The think tank also predicts significant sales growth in the Western U.S., where the states of Washington and Colorado should help grow the region’s sales to $11.5 billion in 2023 and eventually $15.3 billion by 2028. In addition, newer states to the recreational cannabis market, like Arizona and New Mexico, should also contribute substantially to the Group’s projection.
One somewhat understandable side effect of the expected upward trend in adult-use sales for the West is a predicted decline in the medical marijuana sector. While sales for 2022 came in at around $2.3 billion, Brightfields predicts that number will decline to $2 billion by 2028.
The region of the country that will experience a potential explosion in sales growth is the Midwest, according to the forecast. With recreational sales set to begin in Missouri soon and states like Ohio and Minnesota on the verge of legalizing adult-use cannabis in the next couple of years, the region is poised for exponential expansion by 2028.
The area of the country the Group predicts to have the least growth potential is the Southern U.S., with most states focusing predominantly on medicinal cannabis sales over the next five years.
As part of the study, Brightfield also examined the popularity of cannabis products by category. According to their findings, flower still dominates the industry, with sales exceeding $11.6 billion in 2022, while vape products came in second place with annual sales of $5.9 billion for 2022.
Interestingly, one of the industry’s more unique developments that should continue to blossom over the next five years came from infused beverages. Sales for the innovative products topped $290 million in 2022, and the Group believes that number could reach $640 million by 2028.
Along with the Brightfield Group’s forecast for the recreational cannabis industry, similar studies by the ,Brandessence Market Research Group and ,Research and Markets show an overall anticipated increase in global market growth for the psychedelic drug sector (such as psilocybin, ketamine, and LSD) and the hemp industry respectively. The market for legal psychedelics could reach $11.82 billion by 2029, and hemp should exceed $18.1 billion by 2027.
The 21st century is almost a quarter complete, and an undeniable and economically potent facet of those first 25 years will undoubtedly be the rise of the formerly illicit drug market as a legal and regulated sector contributing mightily to global financial expansion and stability. Studies like the one just released by the Brightfield Group provide much-needed good news for an ailing American economy and inspiration for would-be entrepreneurs eager to apply their imaginations and work ethic to a still young and expanding industry.