Thursday, February 22, 2024

US Cannabis Industry ‘Flourishing’ In Spite Of (Or Because Of?) General Economic Downturn

With or without federal reform, the meteoric rise of cannabis continues, prompting one to wonder what lawmakers and prohibitionists are thinking.

By Natan Ponieman

While the cannabis industry is known for offering investors its own mixture of tricks and treats, a new report by CNN Business is expressing new hope for the cannabis sector.

“Despite a global pandemic, discombobulated supply chains, ballooning inflation and an ongoing fight to legalize marijuana on a federal level, the cannabis industry in America is flourishing,” writes CNN Business.

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The report pointed to data from Marijuana Business Daily, which states that cannabis sales hit $20 billion in 2020, are on pace to top $26 billion this year and are projected to jump to $45.9 billion in 2025, making the cannabis industry larger than the craft beer industry by the mid-decade.

Chris Walsh, chief executive officer and president of MJBizDaily, a cannabis analysis firm that organized the sector’s largest trade show last week, stated that “these are potentially conservative numbers with what we see playing out.”

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With the majority of Americans now living in a state where some form of cannabis is legal, the industry got a substantial push when dispensaries were deemed essential businesses throughout the pandemic and quickly became the worthy recipients of extra cash people had on hand from much-need stimulus checks. And this is not to mention that COVID-19 restrictions kept people at home and in front of their TVs or binging on Netflix.

RELATED: The Cannabis Industry’s ‘Essential’ Upside From COVID-19

Be that as it may, “the past 12 to 18 months show there is more to the story than a COVID bump,” Walsh said, as “sales continued to accelerate at a record pace in markets across the US — notably in established states, such as Colorado, Washington and Oregon.”

Walsh told CNN that we’re seeing the next phase of a maturing industry, which is also being reflected in expanded opportunities for private capital raising and a growing job market.

“The industry is also expanding rapidly and creating jobs. It’s estimated that there were 321,000 full-time jobs in the cannabis industry in 2020, up from 234,700 the year before,” said Karson Humiston, CEO and founder of Vangst, a company that provides job recruiting services for the cannabis sector.

RELATED: 32% Cannabis Job Growth In 2020, Despite COVID-19

As per federal cannabis reform, the jury is still out on whether the Biden administration will be the one to finally tilt the balance towards the legal cannabis market.

Walsh said that on Capitol Hill, whispers of federal marijuana reform and legalization have grown to a clamor. But because of a lack of consensus among lawmakers and industry members, change is not on the immediate horizon, he opined.

“I’m still doubtful that we’re going to see any significant federal reform next year… including in banking,” Walsh told CNN Business.

RELATED: COVID Cannabis Consumption Expected To Remain High Even After Pandemic

Benzinga’s take:  With or without federal reform, the meteoric rise of cannabis continues, prompting one to wonder what lawmakers and prohibitionists are thinking. Alexandre Auguste Ledru-Rollin, one of the leaders of the French Revolution, had it right: “There go my people. I must find out where they are going so I can lead them”

This article originally appeared on Benzinga and has been reposted with permission.


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