Even Absent Federal Action, State-Level Cannabis Legalization Will Likely Move The Industry Forward, New Report Says

April 7, 2023 · Forbes

Cannabis advocates who believed a Democratic president and Senate majority would seal the deal for legalization may be sorely disappointed at the resulting inaction and lack of solid consensus on reform. But all is not lost, predicts a new report from New Frontier Data.

“While it is difficult to pinpoint when federal legalization may occur, or what form it might take, it seems clear that expansion of the legal market will continue to create further public support and social normalization that adds pressure on lawmakers,” says 2023 U.S. Cannabis Report – Market Updates & Projections.

Specifically, the United States now includes 22 states (including the District of Columbia) where high-THC cannabis is legal for adult-use, and 39 (including D.C.) where high-THC cannabis is legal for medical use. (Note: not all legal adult-use states permit cannabis sales).

There’s power in numbers even without Congressional action, the Washington, D.C.-based research company is saying. “We have identified nine states demonstrating strong likelihood to legalize adult-use cannabis, and nine states likely to legalize medical use prior to 2030,” the report says.

Adding those nine “adult-use” states to those already legal for recreational cannabis would bring access up to 62 million consumers, from today’s 10 million current cannabis consumers in those states, the researchers predict.

Adding nine states to the list of “medical” states would bring access to legal medical cannabis up by an additional 70 million American consumers (up from 8.8 million now) in those states.

That’s a lot of dollar signs, the report points out, projecting that from those 18 states an additional $13 billion will be added annually to U.S. legal retail sales. That means “immeasurable political pressure for federal reform.”

Overall: “With each passing year, the number of legal states (and the size of the legal industry) continues to grow, increasing pressure for federal action to address the disconnected patchwork of state regulations nationwide — specifically banking reforms to enable the cannabis industry to fully participate in the national and global financial markets,” the report states.

Of course, not everything is rosy between and among cannabis advocates, a diverse group with its own versions of liberals and moderates. Ruptures appear in such issues as legalization vs. decriminalization; what the appropriate use is of federal taxes for interstate commerce; banking reform; prioritization of social-equity programs; expungement procedures; and investments in cannabis research.

Yet in terms of the rapidly growing number of states legal for some aspect of cannabis, money is bound to influence politics. “Fueled by strong consumer demand in the newest operational legal state markets, annual legal sales of cannabis in the U.S. totaled an estimated $30 billion in 2022,” New Frontier Data estimates. “Annual sales across these states are projected to surpass $35 billion in 2023.

“And, if the pace of state-level legalization continues in the absence of federal policy reform, [annual sales will] grow to an estimated $71 billion by 2030 (with a compound annual growth rate of 12 percent).”

Among the states themselves, New Frontier projects California, New York and Florida by 2030 will be the largest legal markets, with Illinois, Michigan and Pennsylvania “close behind.” Meanwhile, Florida, Ohio and Pennsylvania – states with the most consumers – are likely to legalize adult use in the next few years, while Texas and North Carolina may approve full medical programs by 2025, New Frontier projects.

Legal medical-use states will show a combined 5.2 million patients registered by 2030, the research company further predicts. That’s fully 2 percent of the entire U.S. population. Here, the specific ailments that qualify for cannabis use matter. States permitting broader use – generally beyond cancer and terminal illness – attract “far greater participation” than those with narrower criteria.

In that light, some of the earlier “medical” states authorized cannabis use for epilepsy, HIV/AIDS and glaucoma. New markets, the report says, have added coverage for PTSD, anxiety disorders, Alzheimer’s and autism-spectrum disorders. New research is also pointing to the promise cannabis may hold for opioid dependence and overdoses.

Not surprisingly, New Frontier looked at prices, particularly for cannabis flower. It reported that the oldest adult-use markets, meaning Colorado, Washington and Oregon, have experienced some of the steepest price declines. Since 2010, average prices have fallen 30 percent. Newer markets, on the East Coast, are also seeing falling prices, with dispensaries in Massachusetts, faced with an oversupply of cannabis, suffering price drops as severe as 50 percent since last year at the same time. This past December the Bay State also saw its first adult-use store close since its recreational-use sales began in 2018.

There was some good news in the report, if you ask legal retailers and producers: the erosion of the illicit market. Texas, North Carolina, and Georgia have the largest, currently unregulated state markets, with an estimated $12.1 billion in combined illicit cannabis sales in 2022, New Frontier Data pointed out.

Even barring action to legalize cannabis, this combined illicit market is projected to drop to $18 billion by 2030.

So, the main takeaway of the New Frontier Data report is that, “Without federal action on rescheduling or banking reform in the near term, the current patchwork model of state legalization is expected to perpetuate.” Yet the big “but” here is that smaller-scale factors are at work, especially pressure to facilitate cannabis banking – something that both parties agree on. Plus, the industry has shown “dramatic” revenue growth and the states have matured sufficiently to offer significantly improved business compliance.

Accordingly, even with a possible recession this year and other reasons for uncertainty, cannabis’s surging levels of demand, paired with the growing number of legal states, make for a positive outlook for the industry, New Frontier predicts. (Full Story)

In category:Legalization
Next Post

New Mexico Governor Signs Marijuana Expungements Processing Bill To Build On Legalization Law

The governor of New Mexico has approved a bill to fulfill a key goal of the state’s marijuana legalization law by facilitating automatic expungements for prior cannabis convictions. Gov. Michelle Lujan Grisham (D) signed the legislation from Reps. Andrea Romero…
Previous Post

Cannabis Legalization Update: Minnesota, Michigan, Montana, Maryland, Connecticut & Florida

Minnesota Marijuana Legalization Bill Clears Another Senate Hurdle Minnesota is close to legalizing marijuana after a Senate committee approved a bill by Sen. Lindsey Port (D). The bill has only two more committees to pass before it can be taken to the…
Random Post

FDA Says CBD Still Can't Be Dietary Supplement

The agency called on Congress to develop a better regulatory framework for CBD The U.S. Food and Drug Administration this week announced that it would deny a trio of petitions that requested authorization for cannabidiol (CBD) to be used as a…
Random Post

After Kansas Medical Marijuana Bill Stalls In Senate, Governor Urges Public To Pressure Lawmakers For Action

A bill to legalize medical marijuana stalled in the Kansas legislature on Thursday—but now the governor is urging the public to contact their representatives to demand they take the legislation back up for action “this session.” Gov. Laura Kelly (D), who has…
Random Post

Hunter Biden’s Attorneys Cite Marijuana And Gun Ruling To Deter Charges On Alleged Federal Form Lying, Reports Say

Attorneys for President Joe Biden’s son reportedly told Justice Department officials that a recent federal court ruling on gun rights for people who use marijuana should invalidate any charges related to allegations that he lied about his drug use on…
Random Post

Minnesota poised to become 23rd state to legalize recreational marijuana

Minnesota is poised to become the 23rd state to legalize recreational marijuana, after the state Senate gave its final stamp of approval on legislation early Saturday morning. The bill, which would allow adults over 21 to carry up to 2…