As we approach the end of another year, it is important to reflect on the trends of the past 12 months to better anticipate the ebb and flow of the future — particularly when it comes to the ever-shifting world of the cannabis market. To those plugged into marijuana news, it is no surprise to learn that 2020 was a whirlwind year for weed. No fewer than four states changed their marijuana regulations, and many others saw a massive benefit from medical and recreational sales during a time of unprecedented economic crisis.
Marijuana activists, legislators, and entrepreneurs all have their eyes on existing cannabis markets to understand better how different markets behave. Though the year isn’t officially over, here are some of the best-performing cannabis markets in America, which could set precedents for proper marijuana regulations going forward.
Despite California’s continued struggles against its active cannabis black or “traditional” market, the state continues to dominate in marijuana sales — largely because it boasts the largest population in the U.S. by a wide margin. Still, California expects to top $5 billion in legal sales this year. Estimates of the black market suggest it is even larger than the legal market, indicating that if authorities can alter the tax structure to incentivize greater public participation with legal dispensaries, the state could earn tens of billions in revenues every year.
Among the first two states to legalize adult-use cannabis, Colorado’s Cannabis market has been growing steadily for the better half of the decade. Like every year before it, 2020 is set to crush the annual sales record across the state with consumers spending more than $1.6 billion on marijuana products — a 20 percent increase over the previous year. Experts believe that Colorado’s consumer cannabis habits are beginning to even out to a more predictable pattern and this year could be the last to beat records for some time.
Like other states with a longer history of legal recreational pot, Washington has seen its year-over-year growth rate of marijuana sales start to taper — until 2020. Statewide, the sales increased by more than 20 percent this year, which experts attribute to the pandemic and increasing acceptance of marijuana use even in more conservative corners of the state. In total, Washingtonians spent more than $1.25 billion in legal dispensaries, generating more than $468 million in excise taxes.
Though Illinois has only enjoyed adult-use marijuana since January, it has rapidly become one of the hottest cannabis markets in the country. Every month since February saw an increase in marijuana sales, with the ultimate annual revenues likely topping half a billion dollars across the state. Undoubtedly, a significant portion of the market resides in Chicago, where marijuana dispensaries are much denser. Still, promising first-year Illinois has enjoyed is likely to influence nearby Midwestern states to adopt cannabis regulations of their own.
Only this November did Arizonans vote to legalize recreational weed, but already the state enjoys a booming cannabis economy thanks to its medical sales. Medical marijuana alone is projected to garner 2020 sales of between $770 and $910 million; as a result, investors are pumping big bucks into recreational businesses, which will begin March 2021. There is still time for entrepreneurs to get involved in this brand-new, potentially massive adult-use space, which could rival more mature markets in its first year of operation.
Unlike Arizona, Florida has yet to legalize recreational marijuana, but its medical marijuana market remains massive nonetheless. In fact, for several years Florida has been a top-performing state for cannabis sales despite having stringent regulations for medical use. In 2019, sales exceeded $1 billion, and because 2020 brought the first-time legalization of medical cannabis edibles in the state, sales are likely to be hundreds of millions of dollars higher this year. Florida marijuana activists are planning to push for legalization on the 2022 ballot, but Florida lawmakers could push the timeline up if properly incentivized with tax revenues.
Though 2020 did not offer much in the way of good news, the outstanding performance of marijuana dispensaries across the country has shown that even in times of crisis, cannabis pays. It is likely that the billion-dollar revenues in states like California and Washington will encourage broader legalization across the South and Midwest, opening more doors for weed lovers everywhere.