Recreational marijuana sales are predicted to reach $20 billion by 2022, regardless of its illegal federal status.
Analyst Bobby Burleson of Canaccord Genuity estimates the U.S. will generate $12.8 billion in retail sales in 2019, with sales potentially growing by 20% each year, according to Barron’s.
In a note written to clients on Monday, Burleson increased his 2020 state estimate to $488 million in retail sales from $277 million, to account for recreational sales. He predicts compound annual growth of 66% between 2019 and 2022.
“While regulations in the state will still need time to be worked out, we expect existing medical market operators will be the first to receive licenses under the state’s new laws,” wrote Burleson.
California’s legal cannabis market is expected to grow to $5.6 billion by 2022, despite the continuing presence of a large black market “that has persisted due to heavy taxation on legal sales and local municipalities that have banned cannabis sales.”
“Any crackdown bodes well for legal operators in the state and the law that enables home delivery into municipalities that have banned cannabis operators negates the convenience factor for some illicit sales,” he added.
A remarkable amount of growth comes from Illinois, whose lawmakers recently approved a bill to legalize recreational cannabis for adult use in 2020.
“With a population of almost 13 [million] we believe the Illinois market could quickly become one of the largest in the country,” Burleson wrote.
Despite the optimistic outlook, expectations were lowered by New York and New Jersey, where lawmakers in both states failed to pass legislation to allow recreational sales. Recreational sales likely won’t come to New York until 2022, according to Burleson.
Oscar Pascual is the editor of Smell the Truth, syndicated on GreenState and SFGATE. Smell The Truth is one of the internet’s most popular destinations for cannabis-related news and culture. This blog is not written or edited by Hearst. The authors are solely responsible for the content.