| Graphic: Medical Marijuana Markets |
It’s no secret that medical marijuana has become a big business in the United States. Medicinal cannabis sales this year are projected to reach $1.7 billion, according to an “investment-grade report on the business of medical marijuana” released this week.
What that means is that marijuana is hard on the heels of Viagra, another of America’s favorite medications. Viagra, the anti-impotence drug, has sales of $1.9 billion a year.
The $1.7 billion figure represents estimated sales of marijuana through dispensaries in states with medical marijuana laws.
The Sea Change Strategy LLC report, “The State of the Medical Marijuana Markets 2011,” adds new levels of meaning to the term “Green Rush.” It predicts that the number of states where medical marijuana is sold will double in the next five years.
The demand for cannabis in states which already have medical marijuana will also grow, according to the report.
About 24.8 million Americans are eligible to get doctor’s recommendations and buy pot in the 15 medical marijuana states and the District of Columbia, the report said. About 730,000 people have already actually done so.
According to the report, viable medical marijuana markets exist in seven states (California, Colorado, Michigan, Montana, Oregon, Washington and New Mexico) and will open this year in five more (Arizona, Maine, New Jersey, Rhode Island and the District of Columbia).
While California and Colorado account for a whopping 92 percent of the wholesale and retail dispensary-driven medical marijuana sales nationally, according to the report, Arizona, Michigan and Washington are considered “well-positioned” for significant growth.
Regulatory clarity will arise as states adopt regulation and license processes that facilitate the sale of medical marijuana, the report predicts.
“We’re witnessing the beginning of a legal business ecosystem forming around medical marijuana,” said the report’s editor, Ted Rose. “We undertook this effort because we noticed a dearth of reliable market information about this politically charged business.”
“Hundreds of businesses exist around the country that cultivate and sell marijuana to customers,” Rose said. “Many of these businesses emerged in the wake of the Obama Administration’s decision to deprioritize federal prosecutions of individuals and businesses complying with state medical marijuana laws.
” ‘The State of the Medical Marijuana Markets 2011’ shows which states represent the most active markets, who is making money, and how they are doing it,” Rose said.
The cannabis industry as a whole, including the black market and the medical “gray market,” generates anywhere from $18 billion to $35.8 billion a year, reports Al Olson at MSNBC. The huge variance indicates the unreliability of data about an industry that is considered illegal by the federal government.
Sea Change Strategy LLC is an independent financial analysis firm that specializes in new and unique markets.
You can buy the complete report for $1,150 here.