During a year that saw hundreds of thousands of American deaths and widespread suffering, so-called vice industries thrived. Whether for mental health needs, self-medication, or pure recreation, the consuming public hoarded alcohol and other substances in an apparent effort to cope with the outbreak and social isolation over the past 12 months. And one of the biggest beneficiaries was the cannabis industry, which saw explosive growth in 2020 that’s expected to continue into the next decade and beyond as an increasing number of states legalize recreational marijuana use.
On weed enthusiasts’ high holiday of 4/20, cannabis analytics and tech provider Akerna projects that legal cannabis sales will cross $95 million on that day alone. Perhaps that’s not surprising on a day that encourages excess. But it’s also representative of a larger trend.
“Americans purchased $18.3 billion in cannabis products over the past calendar year, $7.6 billion more than the $10.7 billion in sales the previous year,” writes the cannabis-focused Leafly in a report compiled from marijuana state tax and revenue records.
Some of that is clearly linked to the increasing number of states that have legalized marijuana, either recreationally or for medical use, in the past few years. New York this year became one of the largest states in the nation to legalize recreational marijuana. Of all 50 states, 48 allow for some form of medical marijuana; 16 states have legalized it recreationally, including the entire West Coast.
But the pandemic clearly had an effect on marijuana sales that may persist into the future. Americans may have been stocking up to limit interactions with dispensaries that may have closed down, and an influx of new customers in states legalizing the drug affected the revenue growth. “New consumers and patients, and newly legal states, played a role in 2020’s cannabis boom. But the main driver was an increase in the average purchase size of established consumers, who increased their average monthly spends by 33%,” according to Leafly.
As cannabis becomes more culturally acceptable and legalization spreads across the nation, the trend will only continue, according to analysts. One report from New Frontier Data projects that the legal marijuana industry in the U.S. alone will swell to $41.5 billion by 2025, a compound annual growth rate of 21% from 2019.
The 2020 boom in the industry likely had pandemic-related roots. The marijuana dispensary operator Verilife conducted a survey finding that 72% of respondents said COVID was the No. 1 cause of stress and burnout in their lives, and that 40% of these participants said they used cannabis to cope. But with an ever expanding industry and growing acceptance of weed, don’t expect the wave to subside alongside the coronavirus.
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