Adult-Use Cannabis Sales In U.S. To Surpass $30B By 2025 Driven By NJ, NY, Others

In the last few months, we’ve seen a significant surge in the number of U.S. states with adult-use cannabis as New Mexico, New York, Virginia, Arizona, Montana and New Jersey moved to legalize.

These states will be responsible for a significant portion of the growth of the adult-use market over the next five years, according to a recent report from the Brightfield Group.

The national market is set to reach $30.6 billion by 2025.

The Eastern Flip

Following various state-level meetings in 2019 and legislative discussion in 2020, many states on the Eastern seaboard seem likely to flip on legalization, especially after New Jersey and New York moved to do so, the Brightfield report said. 

Legalization proposals in Connecticut and Pennsylvania count not only on the support of these states’ residents, but also of their governors.

Growth in the adult-use market will continue to be driven by these new market openings and the expansion of recently opened markets, especially in populous Midwestern and Eastern states.

Following the 2020 elections where Democrats took control of both chambers of Congress and the presidency, the likelihood of federal-level cannabis policy reform in the near future has increased substantially, Brightfield said.

Policy shifts of this nature would in all likelihood allow each state to determine its own approach to regulation without intervention from federal authorities or operators — though in some states cannabis will likely remain partially or fully illegal for possession or sale.

Federal-level adjustments would prompt growth by paving the way for companies to receive financing and use federally insured banking services, the study said.

This in turn could trigger the entry of a number of sizeable mainstream companies from other industries such as CPG, alcohol and tobacco, as well as Canadian cannabis companies, into U.S. cannabis markets.

Other Key Findings

Other key findings from the report include:

• Despite the pandemic, adult-use sales increased significantly, from $7.2 billion in 2019 to $11.1 billion in 2020.
• Adult-use cannabis sales are set to increase by another 27% in 2021.
• Notable catalysts for growth from 2019 to 2020 include increased consumption among existing cannabis consumers and new retail openings, including the populous Midwestern states of Illinois and Michigan.
• Medical cannabis sales represent an increasingly smaller share of the overall cannabis market as adult-use expands at a comparatively rapid rate, decreasing from 41.2% of all cannabis sales in 2020 to a projected 26.9% in 2025.
• Much of the growth in the U.S. cannabis market from 2021 to 2025 will come from states that recently passed adult-use legislation, especially population centers like New York and New Jersey; beginning cannabis sales; and additional large states, such as Pennsylvania, passing and enacting legislation in the near future.

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