Over the past decade, cannabis has filtered into the mainstream retail market. Broadscale legalization of the plant has contributed to a surge in investor interest, where cannabis investors traded pot stocks like Aurora Cannabis (NYSE:ACB), Innovative Industrial Properties (NYSE:IIPR) and Cronos Group (NASDAQ:CRON) during the first quarter of 2019.

Boasting long-term potential for growth, cannabis stocks are a popular choice for investors who want to see an increase in the value of their portfolio as time progresses. Take Hexo (NYSE: HEXO) and Supreme Cannabis (OTC: SPRWF) for example. These stocks have experienced 100 percent and 55 percent year-to-date growth in value, respectively.

According to recent industry coverage from Christopher Carey, Vice President of equity research at Bank of America, the cannabis industry could be on-track to raking in $166 billion on an annual basis.

“A global $166 billion industry is emerging from the shadows,” says Carey, who made the statement after North Carolina-based Bank of America Merrill Lynch launched coverage of the rapidly expanding legal weed sector.

A separate cannabis market report published in February by Euromonitor International suggested that the total value of the cannabis market will top $166 billion by the year 2025.

Cannabis industry could rival alcohol, tobacco, health & wellness industries

Carey’s valuation is more than the $50 billion yearly sales prediction for the year 2029 from Jefferies’ covering analyst Owen Bennett. Carey believes that, in the near future, the legal weed industry could give the tobacco, alcohol and health/wellness industries a run for their money.

He even goes as far as saying that pot could interfere with the $2.6 trillion in revenue that the aforementioned industries rake in combined.

Carey predicts that Canada will account for three percent of the total addressable market in the foreseeable future, while the United States will account for 34 percent.

If he is correct with his analysis of North America’s cannabis market, Canada’s cannabis industry could be yielding $5 billion annually and the U.S. could be making more than $56 billion each year.

Black market activity must be stopped before cannabis can grow to $166 billion industry

Despite the fact that legislation is spreading across North America, the black market is far from dismantled. In fact, it’s getting stronger in places with gluts in supply, such as Colorado and Oregon. By addressing the black market, better profit margins can be expected in the U.S., where 66 percent of the general public support cannabis reform, a record high.

If the industry is to swell to $166 billion, dealing with unlicensed producers and focusing on cannabis legalization at federal level are two tasks that must be accomplished by state and local governments.

On a positive note, the prohibitionist stance on pot looks set to dissolve into widespread acceptance sometime soon, what with Canadian cannabis company Canopy Growth recently purchasing Acreage Farms for $3.4 billion. The deal is contingent on federal cannabis legalization in the U.S., signaling that Canopy senses something exciting on the horizon.