Advancing Legalization Sets Stage for $30 Billion U.S. Cannabis Market Next YearJuly 20, 2021
Market research firm Headset has released a bullish update to its forecast for the cannabis industry, revising its predictions upward.
When Headset put out its first projections three months ago, it estimated that the total value of the U.S. market was set to rise from $22.8 billion this year to $28.3 billion next year. Now, boosted by factors including the addition of Connecticut and New Mexico as recreational markets and a medical program in Alabama, the research group expects annual sales to exceed $30 billion in the U.S. in 2022.“The data also demonstrate that the cannabis industry is not only moving quickly, but there is no indication that the industry will slow down,” the report notes. “Businesses can count on 2022 to be a year of positive growth.”
Breaking it down by category, Headset expects to see growth across the board. Flower remains dominant and will continue to be next year. Whether that’s due to smoking being the most familiar and traditional way to consume cannabis or its lower price point compared to alternatives, sales of dried flower are on pace to reach approximately $11 billion across all legal channels in the U.S. this year and are expected to rise to around $14 billion next year. Vapor pens follow with a projected 2021 total of $5 billion that should add an additional $1 billion or so next year. Concentrates, edibles, and pre-rolls are nearly tied with about 10% of the market apiece, just shy of $2.5 billion each, though they are expected to clear that hurdle next year. Growth rates are expected to remain consistent, meaning there will be little shake-up of overall market share between categories going into 2022.
The report also covers the Canadian market, which Headset pegs at a total $4 billion for this year. While additional retail locations continue to open and consumers shift from unregulated purchases to regulated sales, demand seems to have stabilized in Canada since legalization first went into effect in late 2019; with no prospect of additional markets coming online, Headset projects sales will rise a modest $1.5 billion to $5.5 billion next year.—Danny Sullivan