Legal U.S. Marijuana Market Will Grow To $7.1 Billion In 2016: Report

Katie Sola,

The size of the market for legal marijuana in the United States is projected to grow to $7.1 billion in 2016, according to a report by New Frontier and ArcView Market Research. That represents 26% growth over the previous year, driven largely by adult recreational sales of marijuana, the researchers found.

 

Legal adult recreational marijuana sales topped $998 million in 2015 compared to $351 million in 2014 — growing 184% year-over-year. America’s 2015 marijuana sales were higher than those of Dasani, Oreos and Girl Scout cookies.

The states that have legalized weed are seeing windfalls in “green” taxes, such as the $70 million that Colorado took in during the 2014-15 fiscal year. That’s nearly twice as much revenue than the state earned from alcohol taxes. 

Colorado is expected to generate$135 million in cannabis taxes and licenses fees in fiscal year 2015-16, according to ArcView. The report used medical and recreational consumer expenditures — not retail sales estimates — to arrive at their figures.

A handful of outspoken celebrities have invested in the industry, including Willie Nelson, Calvin Broadus aka Snoop Dogg, and Nick Lachey.

Nick DeSantis, Forbes staff

Recreational marijuana is legal in just four states — Alaska, Colorado, Oregon and Washington — and  Washington D.C. Twenty other states have legalized medical marijuana, although availability varies.  

Sixteen states, mostly in the South, also have legalized CBD-only marijuana. CBD is a non-psychoactive cannabinoid with a variety of medical applications, particularly treating intractable seizures in children. CBD-only states are not included in the gallery.

So how big is the national market for all marijuana?  In 2010, Harvard University professor Jeffrey Miron conservatively estimated that the total marijuana market in the U.S. was worth $14 billion.
That same year, CNBC  arrived at a market estimation of between $35 and $45 billion dollars, based on data from the USDA, the National Survey on Drug Use and Health, and tobacco consumption figures.

Working off Miron’s valuation, sales tax figures, and data from the  Substance Abuse and Mental Health Services Administration, Nerdwallet calculated  in 2013 that the U.S. stood to gain $3 billion in state and local taxes per year if marijuana were legalized.

In an interview with Der Spiegel, Miron said that legalizing marijuana and other drugs could save the U.S. even more money.

“If it legalized drugs, the United States could save $85 billion to $90 billion per year. Roughly half that is spent on the current drugs policy and half that is lost in taxes that the state could have levied on legal drugs,” Miron told Der Spiegel in 2013.