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United States Cannabis Industry to Hit $41 Billion by 2025

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New Frontier Data, a cannabis data, analytics and business intelligence provider, released a new report regarding the future of the cannabis industry. The report reflects the resized market projections following the passing of six cannabis ballot initiatives in five states  — Arizona, Mississippi, Montana, New Jersey, and South Dakota — and an analysis of cannabis consumer behaviors driven by the COVID-19 pandemic.

“History is happening before our eyes as the events of 2020 are fundamentally redefining the U.S. cannabis market and will continue to do so for years to come,” said New Frontier Data. “The pace and scale of growth the industry is experiencing is a compelling proof point that cannabis is evolving into a mainstream consumer category.”

Key findings from the report include:

  • Annual legal (medical and adult-use) sales are projected to grow at a compound annual growth rate (CAGR) of 21%, to reach more than $41 billion by 2025 (from $13.2 billion in 2019)
  • By 2025, an estimated 39% of total annual cannabis demand across the country will be met by legal purchases in regulated marketplaces (from 17% in 2019)
  • Annual legal sales of medical cannabis are projected to grow at a 19% CAGR through 2025, to an estimated $16.3 billion (from $5.9 billion in 2019), while adult-use sales are projected to grow at a 23% CAGR, to $25.1 billion (from $7.4 billion in 2019)
  • Increased consumer access to cannabis in newly passed legal markets is estimated to generate $1.2 billion in revenue by 2022
  • Monthly consumer spending increased by an average of $149 between March and October in 14 legal markets analyzed
  • Flower gained market share to account for half of product sales by late October
  • 72% of consumers have changed their social consumption behaviors, and 33% of purely social consumers (those who only consume with others) have not used cannabis during the pandemic