The effects of recreational marijuana legalization on the California pot market are hard to predict. We already have a healthy medical marijuana industry where getting weed legitimately is as easy as faking back pain. And it remains to be seen if recreational cannabis will open the door to more retailing. In Los Angeles, a movement is under way to continue to limit the number of dispensaries in town regardless of whether or not Proposition 64 passes. Under that measure, which would legalize pot for those 21 and older, other cities will have the right to say no to weed businesses.
Still, according to an updated report by New Frontier Data and Arcview Market Research, if California, Arizona, Nevada, Massachusetts, Maine, Montana and Florida all legalize weed come November, it would boost the legal marijuana market by $2.7 billion in 2018 alone.
The additional sales emancipated by legalization in those states would be worth an additional $8 billion by 2020, and the rate of U.S. market growth for cannabis sales is expected to be 29 percent in this best-case scenario, according to the updated report.
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"The cannabis industry is one of the fastest-growing sectors in the economy and continues to astonish those in and out of the space," said Giadha DeCarcer, founder and CEO of New Frontier. "There are a record number of cannabis legalization initiatives on the ballot this November, which could account for as much as 38 percent of the total market by 2020. These markets will have an enormous impact on the cannabis industry."
Baker, a customer engagement platform for dispensaries, recently released data on recreational versus medical sales in Colorado and Oregon, where both are legal. It found that recreational sales this year have surpassed the $80 million mark, while medical sales are flat at about $40 million. Medical customers, however, tend to spend more — about 2.5 times more — when they visit their favorite collective, according to the data. The average medical purchase is $117, but pre-rolled joints are 283 percent more popular for recreational customers.
"We are also seeing the emergence of companies that come to the recreational market with smaller serving sizes," a Baker spokeswoman said.
Any way you slice it, if California legalizes recreational pot, somebody's going to get rich.