Data firm says U.S. cannabis market sales have topped $13.6 billion

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Bethan Rose Jenkins, Cannabis News Writer/Editorial

Sales of legal cannabis in the United States are on an upward incline. New Frontier Data a Washington-based company that aims to provide transparency for the legal cannabis market through providing industry participants with up-to-date data and analysis recently published a report on U.S. cannabis sales. The results are promising. 

If the data firm’s annual sales predictions are anything to go by, cannabis producers, suppliers, manufacturers and retailers ought to buckle up for what’s to come. Just two years ago, in 2018, U.S. cannabis sales reached $10.3 billion. If that wasn’t enough to make jaws drop, the fact that last year’s figures were on-track to swell by 32 percent sure should be; New Frontier Data says that legal weed sales crept up to $13.6 billion in 2019.

Moving forwards, analysts foresee exponential growth for the U.S. cannabis market, with total combined legal sales in both medical and recreational states forecast to inflate at a compound annual growth rate (CAGR) of 14 percent within the next five years; approaching $30 billion in revenue by 2025.

New Frontier Data’s U.S. cannabis sales report: Predictions for the  market  

It appears that the legal medical cannabis and adult-use cannabis sectors in the U.S. demonstrate significant revenue growth potential, according to analysts. The results of their latest sales predictions report indicate that combined U.S. sales of medical cannabis could grow at a CAGR of 14 percent over the next five years; soaring from $4.4 billion in 2018 to $13.1 billion in 2025. Total legal recreational cannabis sales, on the other hand, are expected to grow at a CAGR of 16 percent; escalating from $5.9 billion in 2018 to $16.6 billion in 2025.

What about the black market for cannabis in the U.S.? Dismantling the illicit trading of cannabis has been a primary goal of the lawmakers that have initiated/supported legalization measures. Fortunately, if New Frontier Data analysts are correct in their predictions, total sales of illegal cannabis in the U.S. will shrink 11 percent by 2025; a $7 billion reduction since 2018, when analysts estimated that the black market was worth a colossal $64.3 billion. 

Coronavirus crisis could hurt revenue earned from cannabis sales in the U.S.  

Although New Frontier Data’s U.S. cannabis market report indicates that the legal market is growing continuously, a deadly virus could put a spanner in the works. The coronavirus (COVID-19) pandemic has spread across the planet and, as of March 27, has claimed 24,000 lives. As the death toll and victim count rises, so does the level of concern among cannabis business owners, not to mention business professionals in other industries. 

Because of the coronavirus, the global economy is on the verge of collapsing; something that has been reflected on the cannabis industry. For example, supply chains are drying up and The Horizons Marijuana Life Sciences Index ETF has plummeted almost 45 percent in the past 30 days! Numerous cannabis trade shows, expos and events have also been cancelled.

However, despite the nationwide enforcement of social distancing, cannabis dispensaries in certain states have recorded impressive sales figures. Interestingly, cannabis companies are being deemed “essential businesses” amid the COVID-19 disaster, suggesting that the plant is becoming a necessary household item. Notwithstanding the fact that China’s supply chain is gradually recovering, cannabis companies are still feeling the effects and will likely be for the next few months.