Mid Year Update: The Metamorphosis of the U.S. Marijuana Market Begins
Our midyear review of the legalized marijuana market affirms our expectation that 2016 retail sales are on track to meet or exceed $6.5 billion. We reiterate our forecast for annual sales to reach $25 billion by 2020 and extend our forecast to 2021 at which time we expect revenues to reach approximately $30 billion (5 year CAGR ~35%).
In this report, we note the beginning of what we characterize as a marijuana market metamorphosis as states with both legalized medical and recreational use evaluate the practicality of a merged regulatory regime. We see this effort presently in Washington, Oregon and Alaska and expect that Colorado will soon follow. This trend is consistent with our thesis (“The GreenWave Report” October 2014) that initially bifurcated marijuana markets will merge under a shared regulatory system into substantially larger enterprises.
Now that California has passed the recreational use of Marijuana, we expect the implementation of a combined regulated market as soon as 2018. A combined California market is significant, not only because of its sheer size (~55% of the U.S. market today), but also it would mark the first state to implement regulations for a fully legal market without initial oversight of medical use purchases. This could serve as a catalyst for similar action in Nevada, Massachusetts and Maine. Accordingly, we have redefined the methodology for our model beginning in 2018.Our revenue segments are now characterized as “Fully Legal” and “Medical Only” (for those states that have not passed recreational use).
This report, the only COMPREHENSIVE and TRANSPARENT analysis available in the marketplace today includes:
– Rationale for a Marijuana Market Metamorphosis
– State by State analysis of our 2016 market expectations
– Revised modeling methodology with extended forecast
– Detailed and transparent analysis of California’s market size
– A comprehensive analysis of medical marijuana cardholder purchases
– Other relevant analysis suited for the institutional investor