Even with last year’s downturn, the U.S. legal cannabis market, which comprises both medical and adult-use, is poised to reach $45 billion in sales in 2027. This bullish projection is the latest made by top cannabis researcher BDSA, which just released its key market forecast update. In addition to long-term projections, BDSA estimates that the legal U.S. market is expected to grow 12% by the end of 2023, reaching $29.6 billion.
The total global legal cannabis industry is predicted to reach $36.7 billion in 2023, with 80% of sales coming from the U.S. markets. A big reason for this surge, despite recent setbacks, is the booming cannabis markets in states such as Missouri, New Jersey and New York. And, although mature Western markets such as Colorado and California have experienced sales stagnation or decline due to price compression, said Roy Bingham, co-founder and CEO of BDSA, “They will continue to account for a substantial portion of legal sales through 2027.”
12 states sold more than a billion dollars-worth of recreational weed last month
Twelve adult-use states just reported their numbers for August, and cumulatively, they raked in more than $1 billion in recreational weed sales. Leading the way is Michigan with $276 million in pot profit – $270.6 million of which was exclusively adult use sales.
According to the state’s Cannabis Regulatory Agency, Michigan sold over 83,800 pounds of flower in August, which is a 5% increase from the previous month. This is despite the fact that the average cost of an ounce dropped from $98 to $94 over the same time frame. While the overwhelming majority of customers are local, a substantial percentage are from out of state, either visiting for whatever reason or traveling from neighboring Indiana for the sole purpose of buying weed.
Illinois ($165.7 million) and Missouri ($119 million) also had a sold month in August. Illinois was close to their all-time sale record of $166.9 million (from the previous month of July), and they are projected to rake in roughly $1.9 billion by year’s end, putting it at a 1 percent year-over-year increase.
Missouri legalized recreational weed less than 1 year ago, in December 2022, and officially launched their retail program in February of this year, and they’re already one of the top markets in the nation. Although August sales were 3.4 percent lower than July, recreational sales are quickly outpacing medical sales in the states. By last month, medical cannabis sales accounted for only 18 percent of the total market.
Massachusetts ($1.58 million), Maryland ($91.4 million), New Mexico ($48.2 million), Montana ($28.7 million), Connecticut ($24.9 million), Maine ($21.6), New York ($17.6 million) and Rhode Island ($9.7 million) all saw record breaking sales in August. Altogether, these 12 states are expected to earn over $11 billion in recreational cannabis sales by the end of 2023. Oregon ($81.6 million) has seen a consistent decline in cannabis sales over the last couple of years down 16% 2021-22 and 8% 2022-23.
What about the other legal states?
The other eight states with adult-use cannabis markets have yet to report their most recent figures. California, which averaged $361.6 million in monthly sales through the first half of the year, reports their sales figures quarterly, so we’re waiting until after September 30th to get their newest numbers.
Although still a huge market, the Colorado Department of Revenue estimates that overall cannabis sales will be around 12% lower in 2023 than the year prior, based on data collected so far. Colorado dispensaries (recreational and medical) saw a total of $920,069,946 between January and July of this year.
Washington hasn’t reported their numbers yet either, but state cannabis sales are projected to reach $1.23 billion in combined adult-use and medical transactions this year, representing a 4.8% decrease compared to 2022, according to data from the state’s Liquor and Cannabis Board. I couldn’t find data specific to the adult-use market.
Arizona saw some pretty high numbers when they launched recreational sales back in January 2021 – retailers sold over $1.36 billion in their first year. However, the market has remained stagnant since then, with the state’s total 2023 sales likely to come in at around $1.35 billion.
Nevada, as well as emerging programs in Maryland and New Jersey, are expected to surpass $700 million in total cannabis sales for 2023. Several states with programs that have languished well below average, such as Louisiana and Minnesota, implemented new rules with the hopes of expanding participation. However, access remains a problem in many states with limited medical programs, such as Georgia and Iowa.
Final thoughts
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