The marijuana industry is growing so fast that if the government legalized it nationally it would outsell ice cream. A new report from Marijuana Business Daily estimates that the total demand for marijuana, including the black market, is $45-$50 billion.
Annual ice cream sales are only $5.1 billion. Total recreational cannabis sales in the U.S. at this estimate would also top movie ticket sales ($11.1 billion) and snacks like Doritos, Cheetos and Funyuns ($4.9 billion.) The report says, “If the federal government legalized marijuana nationwide, sales might start out at around that level but would likely quickly rise as cannabis gained mainstream acceptance and the market evolved.” At that rate, it wouldn’t take long to eclipse cigarette sales and even potentially beer sales.
As it is, legal recreational and medical cannabis sales in 2016 were $4.0-$4.5 billion. This beats paid music streaming services at $2.5 billion and girl scout cookies at $776 million. “On the recreational side of the business, the originally legalized states are still posting massive growth,” said Editor Chris Walsh. “The demand for marijuana is so enormous in this country,” he added. Walsh thought demand might wane and that the novelty would wear off, but it hasn’t. Just the opposite, it keeps growing.
Another metric that shows how big the industry has become is the employment figures. The report says that the cannabis sector now employs between 165,000 and 230,000 full and part-time workers. “To put this in perspective, there are now more marijuana workers than there are bakers or massage therapists in the United States,” says the report. It even outnumbers dental hygienists.
Then there is the ripple effect of all these jobs. The report points out that these employees spend their earnings on housing, food, travel and entertainment, which helps other local businesses. The launch of all these cannabis businesses has sparked a real estate boom in spaces that were for the most part previously vacant. Tourism is bringing new travel dollars into these states as well.
The report estimates that for every $1 consumers spend at dispensaries, another $3 in economic benefits are created in cities, states and nationwide. State and local municipalities are plugging holes in their budgets with the marijuana tax receipts and making infrastructure repairs and boosting schools.
The one caveat to all this is that the election of Donald Trump has cast a shadow over the industry. While many companies are forging ahead and its business as usual, Walsh said it is definitely the number one worry for companies. Increased enforcement from the Department of Justice would have a significant impact on future sales.