According to a poll conducted by Gallup in November 2020, 68% of American adults support the legalization of marijuana in the United States. This is a significant rise from a paltry 12% who supported the legalization of Marijuana five decades ago. The cannabis industry despite its controversial nature, continues to create businesses and employment opportunities for hundreds of thousands of Americans. While the establishment of dispensaries remains the most popular cannabis-related business venture, there are other logistical support businesses, technology companies, and dispensary software development that continue to propel the growth of this industry.
The Market Value of Cannabis Business in the United States
The new frontier reported that the United States Cannabis business industry generated an estimated $10.4 billion in revenues in 2018. According to the US Cannabis Report 2019 Industry Outlook, total legal sales of cannabis in the current legal states are projected to grow at a 14% compound annual growth rate (CAGR) over the next years to reach $30 billion by 2025. The report also reveals that the annual sale of medicinal cannabis is projected to grow at a 17% CAGR through 2025 to approximately $13.1 billion by 2025.
In terms of consumption of Cannabis for medicinal or recreational use, the report reveals that approximately 38.4 million US adults consume cannabis at least once annually from an illicit or legal source. About 36% of cannabis consumers reported having used cannabis daily in the past 12 months while 59% reported having used it at least once a week. 44% of cannabis users were people between 25 to 44 years old. These projections come at a time when cannabis remains federally illegal despite the legalization of medicinal marijuana by Washington D.C and some 33 states.
Proposed Legislation that Might affect the US Cannabis Industry
There are two legislations on the Cannabis industry that have been passed by the United States House of Representatives, pending approval by the Senate. If enacted into law, this legislation might completely change the course of the Cannabis industry in the United States
Secure and Fair Banking Act (SAFE Banking Act) of 2022
In February 2022, the SAFE Banking Act was passed for the record sixth time by the US House of representatives and among other things, it seeks to:
- Prevent federal banking regulators from prohibiting, discouraging, or penalizing depository agencies that serve the cannabis industry.
- No longer consider proceeds from Cannabis-related business transactions of businesses operating under state laws as proceeds from unlawful activities.
- Protect financial institutions’ employees from being held by federal law
- Amend requirements for institutions to provide SARs
- Provide additional protection to ancillary businesses providing products or services to legitimate cannabis businesses.
However, this legislation is yet to be passed by the US senate. However, Cannabis legalization crusaders are hopeful that it shall be approved soon and subsequently be enacted into law as soon as possible.
Marijuana Opportunity Reinvestment and Expungement (MORE) Act of 2022
After passing the SAFE Banking Act in February, the House of Representatives also passed the MORE Act in April 2022. This act seeks to retroactively apply to previous marijuana-related convictions, and pending cases and seeks to:
- Expunge Federal Marijuana convictions.
- Impose taxes on Cannabis producers and exporters and use the generated revenue to support people arrested for cannabis-related offenses, including those with previous convictions who would like to participate in the Cannabis industry.
- Condition states’ eligibility for grants on their making of similar changes to the state laws.
However, this legislation faces stiff opposition from most Republican and some Democrat senators.
The Bottom Line
The Cannabis industry is a multibillion-dollar industry that is projected by analysts and observers to grow rapidly in the next three years as new markets continue to open as more states legalize it for medicinal use and adult use. As more legislations continue to relax the restrictions on the Cannabis industry, now is time for you to venture into this industry before it becomes flooded. Want to learn more about the cannabis industry and how MaxQ Technologies can benefit your cannabis business? Contact us today.