A new market research report projects that the U.S. cannabis industry will make an economic impact of nearly $70 billion by 2021.
The U.S. cannabis industry will make an estimated $68.4 billion impact on the American economy by 2021, according to a recently published market research report by Marijuana Business Daily. The Marijuana Business Factbook 2017 estimates that the economic impact of legal marijuana sales will rise from $16 billion-$18 billion in 2016 to $48 billion-$68 billion by 2021, a 241 percent surge.
“The projections are another example of marijuana’s rapid transformation from an industry dominated by black-market players into a legitimate and considerable economic force, quickly becoming a major job generator and bringing new business opportunities that produce significant ripple effects across the country,” writes Eli McVey, an analyst at Marijuana Business Daily.
While cannabis remains federally classified as a Schedule I substance, 29 U.S. states and Washington D.C. have legalized medical marijuana, and eight states plus Washington D.C. have legalized recreational marijuana. Eleven states passed recreational or medical legalization measures last year alone and several that had already passed measures will launch their programs in the coming months.
The industry’s economic impact reflects how the revenue generated by retail sales eventually filters out to cities, states and the country. The report’s projections were based on recreational and medical marijuana retail sales, and an economic multiplier of four was used to quantify the industry’s overall contribution. That means that an additional $3 economic benefit is offered by each dollar spent on cannabis.
The Factbook report identifies examples of how the cannabis industry makes its economic impact. It cites the wages paid to cannabis company employees and how those eventually benefit other local businesses where workers will spend their earnings. The report estimates that the industry currently employees 165,000 to 230,000 full- and part-time workers. Also, the launch of cannabis businesses often stimulates real estate and construction activity. It’s been shown that people increasingly visit states with legalized recreational marijuana, and representatives from cannabis businesses travel more for meetings and conferences, causing an increase in tourism dollars. The industry also generates state and local tax revenue that funds transportation and hospital projects, and government programs like education.
Marijuana Business Daily publishes its cannabis market report every year. This year’s report projects that the nation’s cannabis industry will grow 30 percent in 2017, reaching $6 billion in retail sales before skyrocketing to $17 billion by 2021. The market, the report suggests, shows no signs of slowing. Early adult use marijuana sales this year in both Colorado and Washington have broken records. The current total demand for marijuana, including the illegal market, is estimated to be $45 billion to $50 billion, or nine times that of ice cream.
The complimentary executive summary of the Marijuana Business Factbook 2017 is available to view here.
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