Even with last year’s downturn, the U.S. legal cannabis market, which comprises both medical and adult-use, is poised to reach $45 billion in sales in 2027.
This bullish projection is the latest made by top cannabis researcher BDSA, which just released its key market forecast update.
In addition to long-term projections, BDSA estimates that the legal U.S. market is expected to grow 12% by the end of 2023, reaching $29.6 billion. The total global legal cannabis industry is predicted to reach $36.7 billion in 2023, with 80% of sales coming from the U.S. markets.
A big reason for this surge, despite recent setbacks, is the booming cannabis markets in states such as Missouri, New Jersey and New York. And, although mature Western markets such as Colorado and California have experienced sales stagnation or decline due to price compression, said Roy Bingham, co-founder and CEO of BDSA, “They will continue to account for a substantial portion of legal sales through 2027.”
Following are some highlights of BDSA’s current forecast:
- Missouri legal cannabis sales are estimated to reach $1.4 billion in 2023, driven by a strong start to adult-use sales;
- New York legal cannabis sales are projected to total $631 million by the end of 2023 and by 2027, that figure is estimated to reach $2.5 billion;
- Despite legal challenges, adult-use sales are expected to begin in Florida in 2025 and reach $4.3 billion by 2027; and,
- Pennsylvania is expected to see a slight decline in cannabis spending in 2023, with total legal sales forecast to be just over $1 billion this year.
When asked about the latter state’s cannabis spending dip, Bingham cited several reasons, including the obvious one: Residents are travelling to neighbor states New York and New Jersey, both of which have operational adult-use markets as opposed to Pennsylvania, which only has medical, for their purchases.
But that’s not the only explanation, noted Bingham.
“Price compression is the biggest driver of dollar sales declines in the state,” he said. “Equivalent average retail prices in Pennsylvania declined -25% between April 2022 and April 2023. Unit sales grew steadily in Pennsylvania over that period, but this increase in unit sales was not enough to offset the price compression in the market.”
Headquartered in Louisville, Colorado, BDSA launched in 2015.