Legal Marijuana Money

According to ArcView Market Research and New Frontier Data, two marijuana industry market research groups, Americans spend more on legal marijuana then on Doritos, Cheetos and Funyuns combined.

Americans spend $5.4 billion on legal marijuana, which includes over $1 billion in medical marijuana sales in California, just under $1 billion in legal marijuana sales in Colorado and over $500 million in the State of Washington. In 2015, according to market research firm Euromonitor, Americans spent $4.9 billion on Doritos, Cheetos and Funyuns combined. And that’s just legal marijuana. Illegally bought? That’s a lot more money being spent on it.

Back in 2012, drug policy experts jonathan Caulkins, Angela Hawken, Beau Kilmer and Mark Kleiman estimated that the total market value for marijuana, legal and illegal, is at least $15 billion and could be even $30 billion. ArcView have estimates that see legal marijuana sales growing by an annual rate of 30% over the next five years, assuming more states legalize marijuana. Vermont might be next with a bill to be voted on soon, while California, Nevada, Massachusetts and others have a vote on a similar bill this fall. If ArcView know what they’re talking about, that should put the legal marijuana market at $22 billion by 2020.

While ArcView are trying to encourage people to jump in on the growing and flourishing business, they also note that there are plenty of challenges remaining for the industry. According to federal law, marijuana is still illegal. Because of these federal restrictions, marijuana business don’t have access to the banks, can’t take advantage of tax breaks and other issues, which has led to investors not being too keen on putting money into these businesses. An index of 10 marijuana companies was down by 44% in 2015, while the S&P 500 was more or less flat during the same period.

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