BDS Analytics tracks retail sales for the marijuana industry and recently it came out with an update for how the cannabis market has been doing in the U.S. during the first nine months of the year. The data collected included sales from Arizona, California, Oregon and Colorado.
According to the report, BDS expects that legal cannabis sales for 2018 should hit $11 billion, up from $8.5 billion in 2017 – an increase of 29%. A year ago, sales were up by 31%, and expectations are that by 2020 legal cannabis could be a $23 billion industry.
However, the rate at which legalization progresses in the U.S. will have a big impact on that, and if legalized at the federal level, these numbers could easily be much higher. After all, the legal challenges surrounding cannabis are keeping big pharma, beverage and tobacco companies on the sidelines. Once that changes, watch for the industry to take off in a big way. What we’re seeing now is still a very slow and steady growth that could get expedited very quickly once the federal government isn’t standing in the way.
Concentrates have taken off, and is already at around $1.3 billion – the amount it generated in all of last year.
Vaping has been a popular mode of inhalation for cannabis users, and that has made up more than two-thirds of sales for this segment – contributing more than $860 million in sales thus far.
Edibles is another popular segment of the market that has been growing and seeing its share of sales increase. Expectations are that edible sales will hit near $1 billion this year, up from $652 million a year ago.
Most surprisingly, was the beverage sector – representiong just 5% of the segment’s sales.
Pills and infused goods made up a combined 18%, while chocolate and tinctures made up 15% and 17%, respectively. However, the biggest driver behind the strong performance of edibles was candy, accounting for $267 million in sales, or about 44% of the segment’s total revenue. Combined with chocolate, these two forms of cannabis made up nearly 60% of edible sales so far this year.
As popular as beverages may seem, it’s clear that cannabis users have a sweet tooth and investors shouldn’t ignore the popularity of cannabis-infused gummy bears.
The topicals market has also seen strong growth this year, but with only $65 million in sales year to date it’s still relatively small. However, there’s a lot of potential in this segment, particularly for the users looking for the health effects of cannabis who don’t want to inhale, smoke or eat it.
Topicals may be a bit underrated in today’s market, but over the long term that could change as more research is done on the medicinal benefits of cannabis.
The cannabis industry is growing at a rapid pace and all major segments are showing some strong progress with no hint of slowing down anytime soon. And with Massachusetts now getting into the mix, Michigan recently legalizing and other states likely to follow, sales are only going to continue to grow.