U.S. Cannabis Market Expected To Grow 12% To $30 Billion In 2023
June 13, 2023The legal U.S. cannabis market is on track to approach $30 billion on 12% growth this year. Cannabis market research company BDSA expects the U.S. to deliver $45 billion in legal sales by 2027. Globally, sales are projected to reach $36.7 billion in 2023 (with 80% of sales from U.S. markets), and progress at a compound annual growth rate of 13% from 2022 to 2027.
“Over the next five years, the biggest drivers of cannabis industry growth in the U.S. will be the thriving Midwest and East Coast markets,” said Roy Bingham, co-founder and CEO of BDSA. “New markets, especially adult-use markets like Missouri, New Jersey, and New York, will lead growth. Although mature Western markets such as Colorado and California have experienced sales stagnation or decline due to price compression, they will continue to account for a substantial portion of legal sales through 2027.”
There are four states in BDSA’s category of new markets to watch. The first is Minnesota, which legalized recreational cannabis last month. Sales are expected to begin next year and total $177 million in 2024, with BDSA projecting compound annual growth of 68% from 2023 to 2027 to reach $875 million in 2027. Maryland and Delaware are expected to launch adult-use sales next month and next year, respectively. And Florida is on track to legalize and begin sales in 2025, with the state tapped to hit $4.3 billion by 2027.
The Midwest has two markets poised for further growth in Illinois and Michigan. In Illinois, total spending is forecast to grow by 8.3% to more than $2 billion this year as new licenses continue to come online. Michigan’s numbers have exceeded expectations this year; despite declining prices the state is forecast to grow 19% in total sales by the end of 2023 and to top $3.5 billion in 2027.
States that are declining but still significant include California and Pennsylvania. California continues to be impacted by price compression and illicit competition, which led to annual legal sales declining for the first time in 2022. Based on slow sales in the first quarter of 2023, BDSA forecasts California sales will decline by 9% in 2023, totaling $4.8 billion. Pennsylvania, a key medical market, is also expected to see a slight decline in cannabis spending in 2023, with total legal sales forecast to be just over $1 billion this year.—Danny Sullivan
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