According to the latest market forecast from BDSA, the legal United States cannabis market is predicted to grow 12% by the end of 2023, reaching $29.6 billion.
The report also projects that by 2027, total legal sales in the U.S. will hit $45 billion.
Global legal cannabis sales are estimated to reach $36.7 billion in 2023, with the U.S. contributing 80% of these sales. That’s a compound annual growth rate (CAGR) of 13% from 2022 to 2027.
“Over the next five years, the biggest drivers of cannabis industry growth in the U.S. will be the thriving Midwest and East Coast markets,” Roy Bingham, co-founder and CEO of BDSA, said in a statement. He also noted that emerging adult-use markets such as Missouri, New Jersey, and New York will spearhead this growth.
Despite experiencing sales stagnation or decline due to price compression, established Western markets like Colorado and California are expected to continue accounting for a significant portion of legal sales through 2027.
The report highlights several other states as key growth drivers, as well, such as:
- Missouri, which is expected to reach $1.4 billion in legal cannabis sales in 2023.
- New York, with estimates of $631 million in legal cannabis sales by the end of 2023. Projections for the state have it reaching $2.5 billion by 2027, representing a remarkable CAGR of 71% from 2023 to 2027.
- Illinois, where spending is forecasted to increase by 8.3% to over $2 billion this year as new licenses are rolled out.
- Michigan, with total sales forecasted to grow 19% by the end of the year, reaching an estimated $3.5 billion in 2027.
Additionally, new markets in Delaware, Maryland, and Minnesota are on the verge of launching over the next couple years. Minnesota, which just legalized adult-use cannabis in May, is expected to start sales in 2024. Meanwhile, Maryland and Delaware are slated to begin adult-use sales next month and in late 2024, respectively.
The firm also pointed to Florida, where the “best effort” to legalize adult-use cannabis is moving toward being on the fall ballot. BDSA anticipates the state will begin adult-use sales in 2025 and reach $4.3 billion by 2027.
However, not all states are witnessing growth. BDSA forecasts that legal sales in California will decline by 9% in 2023 due to price compression and illicit competition. Similarly, Pennsylvania’s total legal sales are expected to see a slight decline in 2023.
Overall, the firm maintains that the U.S. cannabis market is still poised for significant growth, underpinned by new markets and continued demand in established ones.