One good thing about election years (and that’s a small sample lot, isn’t it?) is that it’s always an exciting time for the cannabis industry. If you think about it in the long term, hardly an election has gone by even this century without progress in ending cannabis prohibition. Each primary election, more states legalize.
So before we get into the thick of election season this year (oh boy we can hardly wait…) January is a good time to check in and get a feel for the market. Establish where we are now, so that we can measure our progress by end of year. Think of it as “The State of the Cannabis Union” for 2022.
For supplementary US cannabis legalization info, visit our state-by-state guide to contacting authorities in charge of cannabis regulation there. If you’re more interesting in worldwide legalization, that’s a far smaller scope of an article covered there.
Just for a side note, the Mayor of London Sadiq Khan is opting to decriminalize cannabis in London, England. There’s a little international scope anyway.
Recap: Just 5 US States Make Cannabis Fully Illegal
Out of the 50 states of the US + Washington D.C. (in a perpetual legalization twilight zone), only 5 still prohibit cannabis fully. As we stand after 2021:
Fully legal (adult recreational use): Alaska, Arizona, California, Colorado, Washington D.C., Illinois, Maine, Massachusetts, Michigan, Montana, Nevada, New Jersey, New Mexico, New York, Oregon, South Dakota, Vermont, Virginia, Washington
- Medical use only: Alabama, Arkansas, Connecticut, Delaware, Florida, Hawaii, Louisiana, Maryland, Minnesota, Mississippi, Missouri, New Hampshire, North Dakota, Ohio, Oklahoma, Pennsylvania, Rhode Island, Utah, West Virginia
- CBD / hemp allowed: Georgia, Indiana, Iowa, Kentucky, Texas, Wisconsin
- Decriminalized: Nebraska, North Carolina
- Still illegal and criminalized: Idaho, Kansas, South Carolina, Tennessee, Wyoming
Public Support For Legalized Cannabis Grows Every Year
Around about 2012 was the last time that cannabis legalization approval was at 50%, according to polls. Since then, public support has shot up to the 70% range for legalizing cannabis entirely.
More recently, this poll of registered voters only shows support topping 80%:
Only 13% + 3% think that cannabis users or distributors should be prosecuted at all.
The US Cannabis Market is Now a $20 Billion Industry
Forbes was breathless to report in March of 2021 that US cannabis sales had reached $17.5 billion. According to many estimates, we can comfortably tack on a couple billion more. That’s a comfortable 46% increase from 2019. And as more states legalize, that number is just getting bigger.
Marijuana Business Daily says that we currently stand at a market of $20-$24 billion in cannabis retail sales. This year, we are expected to reach $24-$30 billion, with adult-use (recreational) reaching $20 billion alone and the medical cannabis market tacking on another $10 billion. Daring to peek ahead at the year 2024, we glimpse a possible $37 billion.
New Frontier Data has similar projected growth plans. Note that this graph was done in 2019, but still shows 2021 right on target at a $20 billion market. Their growth estimates are far more modest, but still showing a healthy $29 billion retail sales market in 2025.
So bottom line, the cannabis market is a huge boom, and we’re in its lap. Remember that most sales estimates are based on the “worst case” that no more states legalize. Every time a state flips and starts opening dispensaries, we have to re-compute that market forecast. Cannabis is unique in this way; most consumer products are legal in all 50 states so we have a better idea of the consumer base before we start totaling sales.
However, not all legalized states contribute to the market equally. Check out this breakdown of five states:
We see a similar growth curve for California, Colorado, Nevada, Oregon, and Washington. As thriving as the Nevada scene is, it is actually is the smallest market of the five and is the only one to see a drop in annual cannabis sales. Could be a leveling off effect, or impact from COVID on the tourist industry. In any case, all other state markets can look up to California for now.
So when we can add another legalized state, one size does not fit all for estimating the market. Should a state like, say, Montana, come online with full legalization, the population there is just so small that it will be lucky to see ~$230 million max, while California is already pulling in $4 billion by itself.
US Cannabis Market Breakdown
So what are we all buying with all these sales? This chart is a real eye opener to start with:
Even though dabbing and vaping seem like they hog the majority of cannabis industry news (at least around here), we see that good old, humble flower is definitely king! 46% of the US cannabis market is just a sack of nugs. Vape pens (including cartridges, oil pens, pods, etc.) show a decent second at 20% for the US. The rest of the market is scattered down to the various other consumption methods.
Of course, the vape market has been plagued by the black market and health concerns, which we have famously covered on our site. It could be that consumers don’t want to take a chance on consuming mystery oil when they can buy good honest nugs and smoke or vape them as nature intended.
Here’s another chart with an interesting factoid. Among those using cannabis at least once per month, it should come as no surprise that the 18-25 age range is the biggest market. However, it’s worth noting that the women in that age bracket come in a close second to the men. Markets in the US have a distressing pattern of genderizing when they don’t have to. Let’s hope this doesn’t happen to cannabis. Dispensaries, packagers, and marketers, pay attention to the female demographic too!
US States Joining the Cannabis Market in 2022
These states passed adult-use (recreational) legalization measures in 2021 and are expected to start opening dispensaries in 2022:
- Connecticut – Feb. 2022 – projected $750 million market
- Montana – Jan. 2022 – projected $90 million market
- New York – maybe? (projected $245 million market) but don’t hold your breath
New York is a wild card. On the one hand, the state is bogged down in ponderous legislation, damping hopes for a dispensary scene coming online in 2022 at all. On the other nug, New York has a huge projected market. Can you imagine Times Square New Years, now with cannabis?
As for new states legalizing, so far we have these states dialed in to vote on full legalization.
- Delaware
- Oklahoma
- Maryland
- Ohio
- Pennsylvania
- Rhode Island
In addition, ballot measures and petitions are inching forward for full adult-use legalization in Arkansas, Florida, Missouri, and South Dakota.
EXTRA: Our forum post with more news about states preparing measures to legalize cannabis in some form.
Join us all year as we cover the next thrilling chapter in US cannabis history!
Readers, share your thoughts on market growth and legalization of cannabis in the US, here in the comments or in our forum.
