People in the US and Canada spent over $53 billion on marijuana in 2016
The numbers suggest the legal marijuana industry is growing quickly, but it has a ways to go before it topples the black market, which has the lion's share of revenue.2016 was a big year for weed. Seven US states legalized cannabis in some form on Election Day. California, the sixth-largest economy in the world, became the biggest domino to fall with the passage of Proposition 64. Much of the West Coast is now a legal enclave for recreational pot.
Troy Dayton, CEO of Arcview Market Research, credits consumer spending on the black market with creating a runway for growth in the legal market."The enormous amount of existing, if illicit, consumer spending sets cannabis apart from most other major consumer-market investment opportunities throughout history," Dayton said in a statement. Unlike other fast-growing markets, which include organic foods, home video, and mobile, "the cannabis industry doesn't need to create demand for a new product or innovation - it just needs to move demand for an already widely-popular product into legal channels." Brennan Linsley/AP
In an interview with Business Insider earlier this month, Dayton said the sudden popularity of alternative ingestion methods - such as weed-laced topicals, sprays, and edibles - also fueled growth in the legal market. Consumers who would never smoke a joint are finding relief in other products, which offer a wide array of tastes, strengths, and experiences.
AP Photo/David Zalubowski
"It's one of the major reasons that people are going to leave the underground market to go to the aboveground market. It's about variety," Dayton told Business Insider. "You just can't get these products on the underground market."
The so-called green rush shows no sign of slowing down.Arcview projects legal sales will grow at a compound annual growth rate of 26% through 2021, when the North American market is expected to reach $21.6 billion.
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