As 2017 comes to a close, backers of a legal marijuana market can’t help but think, it’s been a good year.
David Royse | LedeTree
By the end of the year, according to Arcview Market Research, legal marijuana sales in the United States will hit $10 billion, a third higher than last year.
California, of course, is the 800 pound gorilla that really made 2017 such a great year for those who want to see momentum in the cannabis legalization move. Californians’ vote in November to legalize non-medical adult use starting Jan. 1 was such a huge booster in that momentum, and will likely make 2018 an enormous year for the industry as well. Arcview noted that California’s medical market is already as big as the total markets in Colorado, Washington, and Oregon combined.
This past year also saw new non-medical marijuana use start in Nevada, Massachusetts and Maine. There was also legalization of medical marijuana in Florida, one of 29 states that now allow its use for medical purposes.
“Our data shows positive indicators across the board for the legal cannabis industry, in North America and around the globe,” Tom Adams, Editor-in-Chief at Arcview Market Research and Principal Analyst at BDS Analytics said in a statement. “The passage of the 2016 ballot initiatives and continued maturation of the existing Adult-Use markets are the primary drivers of the growth this year.
“That’s nothing compared to what we can expect in 2018 and beyond from Nevada’s tourism, and California and Canada planning to launch Adult-Use sales in 2018,” Adams said.
2017 saw continued growth in the number of Americans who think prohibition should end.
— GallupNews (@GallupNews) October 25, 2017
The move to legalize (and tax) marijuana was good for state governors, budget forecasters and writers this past year. California was expecting a huge boost in state revenue from higher taxes – possibly $1 billion – because of medical marijuana sales. Colorado and Washington State were also able to boost spending on certain programs because of higher tax collections.
“During this tough economy states are looking for any way to close their budget shortfalls and it appears that cannabis may hold an answer for them,” said New Frontier Data CEO Giadha Aguirre De Carcer. “New Frontier Data looked at the potential revenues that could be generated from state cannabis taxes and found that in this year alone, states could raise nearly $750 million and triple that number by 2020. These revenues will have a meaningful impact on state programs and provide governors with much needed breathing room in their budgets.”
Also good news for cannabis advocates in 2017: he number of Americans who think marijuana should be legal climbed to an all-time high of 64 percent in October, according to Gallup. The poll also showed that even a majority of Republicans – 51 percent – think cannabis should be legal.
For investors interested in this boom in the marijuana business, 2017 was OK, but the market isn’t quite ripe yet for full-on explosion, in part because of the continuing federal prohibition on the plant. But investors were able to take advantage of movement in our neighbor to the north. Canada passed legislation in November that will legalize non-medical marijuana use by July of 2018, creating a billion dollar industry there that has already seen investors jumping on board.
Aurora Cannabis (NASDAQ: ACBFF) was certainly good for investors. Its stock value was up more than 250 percent by early December, and was heralded by more than one observer as the cannabis stock of the year.
Some of what made 2017 a good year for marijuana proponents also portends a good 2018. For example, there was momentum toward legalization of possession of small amounts of marijuana in Vermont – something that is likely to pass early in the new year. And New Jersey elected a new governor, Phil Murphy, who has promised to push for legalization in the Garden State.
And obviously, in California, while the good news came with the vote in November, the money starts rolling in starting Jan. 1, meaning we may be back this time next year saying it was a good year again in 2018.