Whoa. According to a new report from investment firm Cowen, the national cannabis market could generate as much as $75 billion in gross annual sales by 2030. Their initial forecast predicted $50 billion by 2026, but now they’re saying that the market has already reached that number.
“As such, we are revising our forecasting methodology, including a higher per capita spending estimate,” states Cowen. They also mention that current estimates imply an annual spending of $1,500 year on marijuana, well ahead of their initial $1,000 forecast, which is why they upped their estimate by 25 percent.
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Says Cowen:
Underpinning this estimate is proprietary analysis on binge drinking behavior, as well as the role that legal cannabis access has in terms of driving trial (measured by cannabis first use rates for 18+ consumers). This work builds on our prior assertions that cannabis acts as a substitute social lubricant for consumers. We believe this is the first time detailed state-level binge drinking statistics have been analyzed and juxtaposed against cannabis use, where we found that legal cannabis states (as of 2016) binge drink 13% fewer times per month than non-cannabis states.
The company’s new forecast reflects six major factors: binge drinking intensity variances, binge drinking volumes (binges per month), category spending, category retention, first use cannabis benchmarking and expanded opioid research.
Cowen believes that as more states legalize marijuana, cannabis will replace alcohol and, thus, binge-drinking rates.
As support continues to grow for marijuana legalization, Cowen says they expect to see ballot initiatives to legalize cannabis in both Michigan and Illinois in the upcoming November election. And that expanded access to Maine, Massachusetts and New Jersey could prompt other states in the Northeast to make changes as well.
For the company’s full report, including stocks they’re optimistic about, head here.
