Cannabis industry expected to flourish
America’s cannabis industry will continue growing at double-digit rates over the next four years — even with ambiguity emanating from the White House — as the drug gains in popularity, according to a leading marijuana-research firm.
Legalized pot in North America will continue to grow at a compound annual rate of 27 percent through 2021, according to an Arcview Market Research report released Thursday. The momentum of the past few years won’t be stopped by the Trump Administration, said Chief Executive Officer Troy Dayton.
While President Donald Trump has gone back and forth about his stance on marijuana, Attorney General Jeff Sessions has been a clear opponent and has vowed to enforce laws against drug use, including cannabis. But Dayton and others in the industry say a crackdown is unlikely because of the popularity of the movement and the funds it would take to renew the war on the drug.
“It’s just so politically unpopular, it would be silly,” he said.
About 71 percent of voters say “the government should not enforce federal laws against marijuana in states that have legalized medical or recreational use,” according to a recent poll from Quinnipiac University.
The federal government’s hands are also tied by legislation, Dayton said. Sessions has said he agrees with parts of the Obama administration’s Cole Memorandum, the document that allowed states to develop markets without federal interference. Even if Sessions were to rip up the memo, Congress passed an amendment to an appropriations bill in December 2014 that makes it impossible to use Justice Department funds to interfere with state implementation of medical marijuana. While recreational sales of the drug are unprotected, that could change this fall, Dayton said.
In North America, consumers spent $6.7 billion on legalized weed in 2016, according to the Arcview report. That’s up 34 percent from the prior year. Growth may slow this year because states that voted in favor of legalization in November largely won’t begin sales until 2018, Dayton said.
The report shows that illicit cannabis sales declined in states with legal programs. Overall sales in North America were about $56.1 billion in 2016, 88 percent of which was on the black market. Globally, Arcview expects growth to continue on a similar trajectory.
“We’ve got all these other countries that are passing more laws and also other states, and presumably the federal government could end marijuana prohibition as soon as 2021,” he said. “There’s never been a market that’s grown at 20-plus percent growth each year for 10 years, right? But that’s possible here.”