America’s $6.7Bn Weed Business Expected to Bloom to $21Bn by 2021

America’s $6.7Bn Weed Business Expected to Bloom to $21Bn by 2021

Some analysts are confident that pot is the next great American industry, and the weed industry’s ‘pioneers’ have already poured over $100 million into marijuana-linked businesses over the last six years.

The Green Rush Could Be Worth $21 Billion

Revenues from the U.S. Green Rush are estimated to more than triple by 2021, when the $6.7 bn American pot industry will be worth $21 billion. Experts claim that the business will thrive despite the Trump administration’s possible crackdown. One expert noted that states will continue to hand out licenses and weed shops will not run out of customers.

However, a crackdown will impact the industry as company valuations could sink overnight. Plus, some key investors may decide to stay away from the business for being too risky.

Currently, 29 U.S. states and D.C. have legalized pot in some form – medical, recreational, or both. The industry is gearing up for next year when eight states that legalized medical or recreational pot last year will be able to sell the product. According to estimates, in 2018, 20% of Americans will live in a state where it is legal to purchase and use pot.

What’s more, the industry will be greatly helped by the legalization of pot in Canada which is expected to occur on July 1, 2018. The Canadian market could bring billions of dollars in extra revenues each year.

According to a Yahoo News/Marist Poll, 28 percent of pot users said that they would invest in the business if marijuana were legal; 21 percent of nonusers are also eager to become investors.

More than half of Americans (52%) don’t think it is a bad idea for their bank or retirement fund to pour some money into the pot industry. Younger Americans, however, are more likely to invest in the business than their older peers. According to the poll, 38% of Millennials, 21% of baby boomers, and just 6% of people aged 70 or older think the marijuana industry would make a good investment.

Banks Reluctant to Invest in Pot

The banking sector hasn’t invested in the industry just yet, but many customers have expressed interest in the business. Last month, Bank of America discussed with investors the benefits of investing in the weed industry. Reportedly, 40 institutional investors agreed to take part in the talks.

The U.S. financial consulting firm Cowen & Co. also discussed the issue with its clients, in January. The firm issued a report on the marijuana business opportunities which revealed that the market could generate $50 billion every year by 2026.

However, because cannabis is still considered a controlled substance on the federal level many large banks and companies refuse to invest in it. Smaller, local banks, though, are already doing business with cannabis producers, but they account for less than 3% of the U.S. banks and credit unions.

Cannabis producers are confident that ending the prohibition of pot on a federal level would open the floodgates to bank cash and venture capital funds.
Image Source: Publicdomainpictures

Comments

comments

COMMENTS