Despite Some Stumbles, Total Sales In U.S. Cannabis Market Could Soar To $50.7 Billion By 2028, Says Top Researcher
The U.S. legal cannabis industry took some hits in 2022 but according to top cannabis researcher Brightfield Group, the market is estimated to reach over $31.8 billion annual sales the end of 2023, growing to $50.7 billion in annual sales by 2028.
This is quite a pleasant turnaround from the slump that took hold of the U.S. legal cannabis industry after pandemic-era restrictions faded and the country entered difficult economic times.
Matt Zehner, insights manager at Brightfield Group, cited new market openings as one reason for the uptick.
“2022 was a big year for cannabis, with seven state markets beginning sales (six adult-use, one medical), four of which only commenced in the latter half of the year,” he explained, in an e-mail. “These markets are expected to have sizable growth over the course of the year, particularly those in populous states such as New Jersey and New York, both of which have had somewhat slow openings so far. New York only began sales in the last few days of 2022, so 2023 is effectively the market’s first year.”
Also, growth is expected to come from new states. In the first two months of 2023, three states have begun cannabis sales: two adult-use (Connecticut and Missouri) and one medical (Mississippi).
“Maryland is expected to implement its adult-use sales program this year as well,” continued Zehner. “Aside from new markets, some states that legalized over the past few years are also seeing strong month-over-month increases, such as Maine and Michigan, and are also expected to be growth drivers.”
Other key regional findings include:
*The Eastern United States is on track to be the first regional adult-use bloc in the country. Each of the nine states has a medical program and, as of 2023, seven of the nine states have legalized adult-use;
*With its mature adult-use markets (i.e. Colorado, Washington), adult-use sales in the Western region of the U.S are expected to grow from $11.5 billion in 2022 to $15.3 billion by 2028. This forecast is bolstered by states that have recently legalized, including Arizona and New Mexico;
*Medical cannabis sales in the West are expected to shrink slightly, decreasing from $2.3 billion in 2022 to $2 billion in 2028, as the increasing prevalence of adult-use retail locations in the region eats into medical market share;
*The bulk of growth in the Midwest from 2022 to 2028 will come from increasing adult-use sales, including in new markets like Missouri, Ohio and Minnesota;
* While adult-use markets remain limited in the South, growth in the region will be driven by medical market openings much more than in other regions; and,
*States expected to legalize adult-use cannabis in the next few years include Minnesota, Pennsylvania and Ohio.
The Brightfield report also compared and ranked the strongest product categories. Flower continues to dominate the U.S. cannabis market with $11.6 billion in sales in 2022. However, its share is decreasing year-over-year as consumers increasingly experiment with other product formats. Also, putting a hamper in this category are bans in restrictive medical markets.
Vapes registered as the second largest category. Brightfield predicts that it will grow from $5.9 billion in sales in 2022 to $10.8 billion in sales in 2028.
The fastest growing category is the smallest—drinks. Brightfield is forecasting sales will double from roughly $290 million in 2022 to $640 million by 2028.
Brightfield’s “U.S. Cannabis Market Forecast” report is set to be published this Thursday, February 16, 2023.