Report: U.S. Producing Almost 50 Million Pounds of Cannabis

Production is enough to meet total demand nationally.

A new report by Oregon-based economist Beau Whitney found that the United States is already producing 48.8 million pounds of cannabis product from both legal and illegal sources – more than enough legal production to satisfy the entire national demand for marijuana.

Whitney also found that if legal production continues ramping up, it will outpace illicit market production by 2026.

His hope is that his new economic modeling and forecasting around the cannabis industry will help inform regulators of what he calls a “middle ground” between the wide-open cannabis markets of Colorado, Oklahoma, and Oregon, and stricter markets with business license caps, such as Florida, Illinois, and Pennsylvania.

“What this can do is prevent the overages that are occurring in Michigan, California, and Oregon. You can really take a disciplined approach to licensure,” Whitney said.

“I can tell regulators how many licenses they need” based on calculated local market demand, he added.

Whitney told Green Market Report that there are some long-term lessons for investors and entrepreneurs hidden in the data he found, including that California alone in 2021 produced roughly 22.2 million pounds of cannabis.

“When you have this massive supply coming out of California … why are you setting up all of these siloed programs and cultivation production operations in Michigan and Ohio and Pennsylvania and all over the place? Why are you setting up those now, only to have them wiped out upon full federal legalization?” Whitney asked.

Because of that existing supply from the West Coast and so-called “consumer states,” Whitney said, there’s no real reason for states to continue standing up new cultivation operations. Once cannabis is legalized federally, free market forces will determine which handful of states become the true national suppliers, and those will end up growing the vast majority of cannabis.

That’ll make a lot of intrastate growers unnecessary – and will almost certainly drive many out of business, Whitney said.

“You’re going to set these cultivators up for failure. And that’s a lot of individual wealth destruction,” Whitney said.

Whitney said he calculated the amount of investment money that will be wiped out by redundant cultivation operations to be roughly $100 billion, and that eventuality is “running contrary to social equity and social justice objectives.”

“There’s a real strong argument here for interstate commerce. That’s pretty painfully obvious to me,” Whitney said. “You’ve got almost four million pounds of supply coming out of Oregon, you’ve got 22.2 million pounds coming out of California. That’s half the total supply of the entire U.S.”

Other key findings from the report include:

  • In 2021, three-quarters of consumer demand was satisfied through illicit channels.
  • 73.4% of the total canopy square footage is outdoor, 12.4% is indoor, and 14.2% is greenhouse.
  • A majority of legal supply is indoor, whereas a larger majority of illicit supply is outdoor.

John Schroyer


One comment

  • Derek Ross

    December 3, 2022 at 3:10 pm

    I read a similar article recently. That’s a lot of cannabis! It will be interesting to see how this develops on the sustainability side of things. The cannabis industry has been getting a negative reputation for its carbon footprint https://atmosiscience.com/environmental-impact-of-cannabis-cultivation-processing-consumption/. Many grow operations can’t afford better equipment and continue using things like sodium lightbulbs, which use more energy than LED lights. I’m hopeful as legalization continues, these issues will get resolved.

    Reply

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