Cannabis Industry Recap: 18 Rec States
Right now, 18 states have legalized recreational cannabis, though they haven’t all started adult-use sales with several more in talks to legalize. Over 30 states allow some form of medical marijuana.
Now, despite legalization, there are of course a variety of restrictions. For example, in some states, you can’t purchase flower or edibles and some medical states limit the amount of THC in products.
2020 Saw Huge Sale Increases
Regardless, 2020 was a huge year for cannabis, with sales in California, Colorado, Massachusetts, Michigan, Nevada, Oregon, and Washington increasing 67%.
According to New Frontier Data, total combined sales of cannabis across legal state markets crossed the $20 billion threshold in 2020.
Quarterly sales across both legal medical and adult-use states reached an all-time high in the first quarter of 2021, bringing in $5.84 billion. Sales for the second quarter of this year are projected to surpass $6 billion.
New legal markets are expected to become active in the next two years, so the group projects that total legal sales will reach $43 billion by 2025.
New Frontier Data estimates that California accounts for 26% of legal cannabis sales in the country, Colorado 11%, Washington 7%, Florida 6%, Arizona 5%, Pennsylvania 5%, Illinois 5%, Oregon 5%, Massachusetts 5%, Michigan 5%, and the rest of the legal states making up about 20%.
Of those top ten states I just mentioned, two are medical-only: Pennsylvania and Florida. It will be really interesting to see how those markets grow when they legalize recreational cannabis.
Of course, you can’t count out New Jersey and New York, which will begin rec sales over the next year or so. New Frontier Data projects that they’ll jump into the top ten by 2025.
The most recent Gallup poll (from 2019), shows that 12% of Americans are active marijuana users. As more states legalize, we can probably expect that number to rise.
So who are these users? According to Flowhub, the majority of cannabis users are Millennials. They make up 42% of medical users and 48% of recreational users. That’s a huge segment of the market!
Gen Xers are next. They make up 23% of the medical market and 21% of the rec market.
Gen Z makes up 17% of both the medical and rec markets, while boomers account for 17% of the medical market and 13% of the recreational market.
The Silent Generation, which is the generation before the boomers, accounts for just 1% of the market.
Now Gen Z is going to keep aging up into the market, so they will become a larger part of the industry with time. This is crucial for understanding who you should be catering to when ordering your products as well as advertising your shop.
For more information about the industry and what products you should be stocking, make sure to check out our webinar, The Fastest-Growing Cannabis Products by Market.