Poised to bloom into a $10.2 billion market by 2018, marijuana sales will likely outpace the growth of smartphones, according to ArcView Market Research.
After conducting more than 400 surveys and interviews with cannabis retailers, cultivators, processors, and industry leaders, the second State of Legal Marijuana Markets report, released Tuesday, estimates the U.S. cannabis industry will hit $1.43 billion in sales in 2013, further growing to $2.34 billion in 2014. According to the report, more than 590,000 Americans will have purchased marijuana legally from a retail storefront by the end of this year.
California continues to lead the largest pot markets in the country with $980 million in marijuana sales, but the weed business is fastest growing in Arizona, expected to reach $134 million next year, up from $22 million in 2013.
Bullish on the marijuana industry, the report, from the research arm of the cannabis investor network ArcView Group, predicts 14 additional states will legalize adult use of cannabis and two more states will legalize its medical use in the next five years. Despite this progress, ArcView says regulation and restrictive patient access in New Jersey, Maine, Delaware, and Washington, D.C. will limit the market’s potential in those states.
Steve Berg, the report’s editor and former managing director of Wells Fargo, says these figures show signs of market maturity, noting some companies are “poised to reach large rewards from this historic period of rapid growth.” While marijuana startups have been primarily focused on ancillary businesses, such as providing security systems for growers and dispensaries, investors and entrepreneurs are beginning to consider businesses that “touch the plant” now that the feds have eased up on enforcement.