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Legal Cannabis US sales in 2021 reached $37.4 billion and continued growth is expected for 2022. What makes this so incredible is that cannabis is not legal across the country. In fact, the industry’s sales come solely from 45 million customers.
This is good news for the growth potential of the cannabis industry in the years to come, and in 2022 we will not only see an increase in legal sales, but we will also see other much needed changes. Let’s take a closer look at five of these significant changes that are expected to occur over the next 12 months.
1. Crawl slowly towards normalization
The normalization of cannabis is coming – albeit very slowly. After decades of the war on drugs, it will take time to educate people and convince them to think differently about cannabis. However, 68% of Americans now support legalizing cannabis for adult use, and 91% think people should have access to medical cannabis.
We have also seen that when Americans are given the opportunity to vote on the legalization of medical and adult cannabis, they do so in large numbers. Sadly, we’ve also seen lawmakers ignore the will of the people and take steps to undo what voters have achieved on legalization (we’re looking at you South Dakota and Mississippi).
In other words, Americans accept cannabis much more than lawmakers who worry about their re-election chances. Normalization among people is almost complete. As cannabis markets mature in many states and lawmakers see that backing legalization doesn’t mean the world around them will collapse (or they’ll be out of office), normalization among legislators will get closer to reality in 2022.
2. More new states are legalizing and more local communities are opting
The cannabis industry has momentum as we head into 2022 and hopefully that momentum will lead to more states legalizing cannabis and more local communities allowing cannabis sales within their borders. .
It is very possible that the legalization of cannabis for medical or adult purposes will end up on voters’ ballots in 2022. Alternatively, state legislators can take action to push through the cannabis legalization bills. in the legislative process. More and more lawmakers are realizing that cannabis sales bring in a lot of tax revenue for their states. It’s a particularly hot topic for them when bordering states legalize cannabis and residents cross the border to buy legal products. As a result, they give these tax revenues to neighboring states.
States that cannabis industry experts are watching for adult use and/or medical legalization in some form in 2022 include Arkansas, Delaware, Florida, Maryland, Mississippi (at new), Missouri, Nebraska, New Hampshire, North Dakota, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Carolina, South Dakota (again), and Wyoming.
Of course, not all of these states will legalize cannabis for adult and/or medical use in 2022, but some will, bringing further growth to the cannabis industry and greater access to legal cannabis for more people. of people.
3. Get closer to resolving tax issues for licensees
There is no denying that high taxes make it very difficult for cannabis licensees to exploit. It is also indisputable that high taxes are passed on to consumers in the form of higher prices for legal cannabis. As a result, many people continue to buy from the black market. In 2022, the States must solve these tax problems.
To put it into perspective, consider this – Illinois launched its adult-use cannabis market in January 2020. In 2021, the state generated nearly $100 million more in tax revenue adult cannabis sales than alcohol sales. Obviously, there is a significant imbalance.
In California, the tax problem has gotten so bad that some say the state’s legal cannabis industry is on the verge of collapse. The good news is that California Governor Gavin Newsom said in early January 2022 that he supports cannabis tax reform in the state and plans to work with the Legislature to make changes that will stabilize the market. Hopefully other state lawmakers will do the same.
4. All eyes on the East Coast
California still dominates the cannabis industry in the United States, but as more states legalize cannabis for medical and adult use on the East Coast, they’re getting a lot of attention. Revenues from legal cannabis sales in East Coast markets will reach approximately $6.8 billion in 2022, and this figure is expected to increase to $11.7 billion in 2025.
As you might expect, highly populated states like New Jersey and New York get a lot of attention and big sales projections. New York’s legal market is expected to generate more than $2.8 billion in combined annual sales in 2025, while New Jersey’s $1.6 billion in combined annual sales are projected in 2025.
Looking further south on the East Coast, Florida could legalize sales for adult use in 2022 or soon after. If that happens, Florida would become the second-largest cannabis market in the United States (behind California) with projected annual sales of $3.2 billion in 2025.
5. States with significant long-term growth opportunities take center stage
Speaking of sales projections for 2025, we are beginning to see which states will offer significant long-term growth opportunities in the cannabis industry. Based on helmet splashes, the largest cannabis markets in 2025 will be in these states:
- California: $7.7 billion market
- Florida: $3.2 billion market
- New York: $2.9 billion market
- Arizona: $2.8 billion market
- Illinois: $2.5 billion market
- Michigan: $2.4 billion market
- Colorado: $2.2 billion market
- Pennsylvania: $2.0 billion market
- Washington: $1.7 billion market
- Massachusetts: $1.7 billion market
- Ohio: $1.6 billion market
- New Jersey: $1.6 billion market
- Oregon: $1.4 billion market
- Virginia: $1.3 billion market
- Oklahoma: $1.3 billion market
- Nevada: $1.1 billion market
- Missouri: $1.0 billion market
Each of these 17 states is expected to have over $1 billion in combined annual sales in just three years. Maryland won’t be far behind with projected annual sales of $895 million in 2025. Ultimately, there are great opportunities ahead!
Key takeaways about the evolution of the cannabis industry in 2022
Standardization, growth, legalization, taxes and the East Coast are just some of the key things to watch in the cannabis industry in 2022. In other words, the next 12 months will be all about the acceptance, accessibility and affordability.
You can keep up with all the license changes happening in 2022 by subscribing to the Cannabiz Media License Database, and to keep up to date with mergers and acquisitions, subscribe to Cannabiz Intelligence™. Schedule a demo and see how you can achieve your 2022 goals when you have access to the right reliable data.
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