Dec 07, 2021 Cannabis Business – Why it is growing So Fast
Why is Marijuana (Cannabis) Use Growing So Fast?
Over the last decade, the medical benefits of marijuana (Cannabis) have been thoroughly documented. These include Amyotrophic Lateral Sclerosis (ALS/Lou Gehrig’s disease), Anxiety, Cancer, Cachexia, Crohn’s disease, Glaucoma, Hepatitis C and HIV/AIDS. In fact, the states that have legalized medical marijuana have in most cases listed the approved uses in their legalization statutes or regulations. Marijuana for recreational use, also referred to as the adult use marketplace, is also growing rapidly. Users site feelings of joy, improved relaxation, and increased sense of sight, hearing, taste and appetite.
Cannabis products include flower, pre-rolls, vapes, concentrates, edibles, tinctures and topicals grown from over 750 strains. Direct sales of marijuana is estimated to be around $25 Billion in 2021 and growing rapidly. It is expected to be between $40-45 Billion in 2025. More than half is adult use and the adult use share is increasing.
There are several factors in the success of legalizing marijuana including the pressure from residents, the desire to reduce or eliminate illicit production and use, the tax revenue available to state and local governments and the new jobs created. Cannabis is a BIG business. Significant Cannabis tax revenues go to the municipalities where Cannabis is grown. In 2021, New Jersey, New York, Connecticut, Arizona, Montana and Virginia all legalized the use of marijuana for adult use. This brings the total to 18 states. These states are in the process of setting up the regulatory/licensing process to control the growing and distribution of cannabis products. Many other states are considering the legalization of marijuana.
In future posts, I will talk about the challenges of setting up a cannabis grow facility and of raising the capital necessary among other topics.
Apollo has worked with companies that grow cannabis and supply products/equipment to cannabis growers. We help companies that are starting a new cannabis business or an existing business that seeks to enter one of the newly legalized markets by providing cannabis demand and price forecasts, performing financial modeling and developing business plans to raise capital.
Bryan B Mason
Apollo Consulting Group, Newport, RI