Legal Cannabis Market Grows as Fast as the Internet in the 2000s

At the end of 2016, and with the United States in the lead, the world was saying goodbye to twelve good months for marijuana users. Consuming it for therapeutic purposes was already legal in 28 states of the star and stripes nation, including the District of Columbia; and in nine of them so was its recreational use. Canada announced future steps, debates were being opened in some European countries, and Uruguay was following the (slow) path towards real legalisation. In addition, Israel continued to lead the studies on cannabis and the United States authorised new research, while placing CBD as a schedule 1 drug, starting to blow hot and cold the foundation of a hopeful 2017 for this plant.

In light of this situation it is not surprising that economic figures related to marijuana have been so positive in the last year. US cannabis market sales, from which real data are now available, have been estimated at more than 6.7 billion dollars, about 6.3 billion euros. This is a 30% increase over last year's income, according to the latest report by Arcview Market Research, a specialist in research on the cannabis market.

Arcview has also made an estimate of the cannabis market growth in the coming years. According to their calculations, in 2021 the marijuana industry will involve $ 20.2 billion, some 19.2 billion euros, implying that it will grow 25% each year until reaching this figure at the beginning of the next decade.

This explosive growth has been compared to the internet boom in the 2000s, characterised by an unstoppable breakthrough that ended up turning the network of networks and the broadband into an intrinsic part of our reality.

"The only consumer industry categories I've seen reach $5 billion in annual spending and then post anything like 25% compound annual growth in the next five years are cable television (19%) in the 1990's and the broadband internet (29%) in the 2000's.", said Tom Adams, editor-in-chief of Arcview Market Research. Thus, cannabis legalization and the income explosion produced by this plant follow a very similar path to that experienced by the growth of the Web at the beginning of the millennium.

However, this is not all about economic figures

The data about marijuana users have also been influenced by the progress of legalization. In the period 2014-2015, nearly 25 percent of residents in states where recreational marijuana was legal, such as Washington DC or Colorado, had used cannabis on some occasion. This number doubles the national average, which indicates that 13% of US adults are consumers of the plant, and it is almost three times higher than in Alabama, Mississippi or Iowa, where only 8% consume.

In general, consumption is higher in those states where legal or recreational marijuana has been permitted. This is not surprising. In many cases, the adoption of these laws is accompanied by a social movement present in the states, which already shows a loss of stigma and an increase in interest in the plant that does not occur in many other territories, which reject or do not promote legalisation.

However, laws and activism are not the only realities affecting the industry. The rise of research on the plant, in which its benefits are scientifically explored, will also contribute to a consistent use of cannabis, especially in the medical field. All these factors make marijuana become an increasing alternative and a great ally for therapeutic users in the treatment of symptoms of diseases such as epilepsy or for post-traumatic stress syndrome. And, for recreational consumers, it is a form of stimulation, relaxation or disconnection without having to hide due to prejudices.

In addition, the popularity of alternative consumption methods such as sprays, edible products or vaporisers in all of their forms will play its part in the growth of the user base and the increase in revenues derived from the industry. "It's one of the main reasons why people are going to allow the black marijuana market to go legal," said Troy Dayton, CEO of Arcview. "You cannot get these products clandestinely."

An explosion of business opportunities

The cannabis industry, in full growth, has become a great business opportunity. However, launching a marijuana business or getting licenses in the countries and states that grant them is not the panacea. Many legislations put real obstacles in favour of big business, relegating small farmers to the background, who do not have the money or the means to acquire a license.

On the other hand, entrepreneurs will have to make sure to have access to funding. According to a report by CB Insights, cannabis start-ups have seen a decline in their funding, despite the peak in the last quarter of 2016. "Funding for these cannabis companies suffered a 9% reduction compared to 2015 "The report said. "The flow of transactions was also reduced by 9%," he adds.

Even so, the business seems to be in vogue and the number of entrepreneurs joining the industry grows every day. In Massachusetts, for example, the construction of a cannabis business park has been planned. In California, businesses that target upscale customers looking for exclusive cannabis products are experiencing great expansion, while others focus on capturing the older public and their particular needs. Nor have the celebrities been left behind but they have begun investing in both branded and revolutionary products: Whoopi Goldberg's product range for period cramps is just one example.

Break Time we made this one with water! Have yours with animal milk, nut milk, soy milk or coffee! #whoopiandmaya pic.twitter.com/MDKq7uPRCw

- Whoopi & Maya (@whoopiandmaya) 11 de agosto de 2016

A full range of opportunities in an emerging industry still based on the love for the plant and the freedom to use it without the pressure of social and legal prejudices. Time and users will ultimately tell if the predictions are correct and marijuana is the next great boom.