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US Legal Cannabis Market is Expected to Hit $47 Billion

Medical Cannabis Market Size
Written by Alexandra Hicks
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In a long memo written last Wednesday by RBC Capital Markets they estimate that the United States cannabis market could be worth over $47 billion within the next 10 years or less.

How big is the cannabis market? As it stands, total cannabis sales are quickly catching up to the total amount of beer and wine sales. “In this US, the legal cannabis category is set to grow at a 17% CAGR over the next decade to as much as $47 billion in annual sales (this compares to the current diaper category at $4 billion in sales),” mentions RBC analyst Nik Modi.

Recreational use is driving the cannabis market growth

“Driving the growth is recreational use of the product, particularly concentrates and edibles. Estimates already suggest that the US category alone is $50 billion (this figure includes an estimated amount for black market sales), which compares to spirits $58 billion, wine $65 billion, and beer $117 billion.”

RBC also made note of the recent investment Constellation Brands made in Canopy Growth, the most widely traded cannabis company on the stock market. Constellation Brands currently owns Corona, Modelo, and Svedka. “We believe that Constellation’s approach of sequentially increasing its stake in Canopy is a win-win approach, as it enables both parties to participate in CGC’s upside while allowing Constellation to simultaneously manage leverage levels,” Modi said. Canopy Growth shares have jumped more than 38% since the merger.

A shift in the cannabis market from flowers to concentrates

What’s most interesting about all this is not the tremendous growth itself, but the specific areas in which we’re seeing this growth. A survey done in Colorado showed that since recreational cannabis has been legal, regular flower sales have nearly plummeted. In just a few years, flower sales have dropped from 70% of total sales to only 46%, with concentrate sales rising to make up the difference.

This is especially important since this trend has not arrived yet to Europe, where flowers (both CBD flowers and medical cannabis flowers) are still the leading (and in some cases the only) medical cannabis products, as seen in this review about German Medical Cannabis Challenges.

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About the author

Alexandra Hicks

Alexandra is the managing editor at CBD Testers. She has always been interested in alternative and natural remedies, and the versatility of cannabis as a healing plant is something that greatly appeals to her. It's for this reason that she decided to work as a cannabis industry journalist and editor, to help spread accurate information about the benefits of this plant.

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