The United States is still on track to become the world's largest legal cannabis market, even though only eleven states have legalized adult-use to date.
A new report by data analytics provider Nielsen predicts that total sales of all cannabis products in the US could hit $41 billion by 2025, a five-fold increase over the $8 billion in sales reported last year. In the report, Nielsen points out that this major increase will not be driven by adult-use sales alone. The vastly-expanding CBD market will also account for a large percentage of these sales, especially if the Food and Drug Administration follows through on its promise to regulate CBD-infused foods and beverages.
Back in 2017, New Frontier Data predicted that legal weed sales would only hit $24 billion by 2025, almost half of Nielsen's prediction. The legalization of CBD and other hemp-derived products under the 2018 Farm Bill, along with Michigan and Illinois' recent legalization of adult-use, has convinced analysts that legal weed is going to be far more profitable than seemed possible in 2017.
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Over the past five years, the range of different cannabis products has expanded greatly. Back in 2014, dried flower accounted for 77 percent of all legal weed sales in Colorado and Washington — the only states that had legalized adult-use at the time. In 2018, flower only accounted for 48 percent of legal weed products sold in most adult-use states, as sales of vape pens, edibles, and other products grew.
Not only is the number of individual cannabis products exploding, so is the number of brands. In 2014, Nielsen found 166 legal weed brands in the country, but by 2018, there were 2650 different weed brands on the market. This massive proliferation of brands and products is great news for the market as a whole, but smaller, less-funded startups may find themselves struggling to compete in a marketplace that is becoming more crowded by the minute.
Nielsen, best known for their “Nielsen Ratings” of TV show popularity, also dug deep into cannabis sales data to create a picture of the average “cannabis-interested” US citizen. The report found that these weed-friendly adults were twice as likely to have tobacco products in their households than teetotalers. However, 41 percent of these individuals said they would consider using weed to help them quit smoking.
Cannabis-interested adults were also found to be 41 percent more likely to drink beer than those who turn their noses up at weed. But one out of every five cannabis users said that weed helps them spend less on store-bought beer, reinforcing research studies that have found links between weed legalization and decreased alcohol sales.
The Nielsen report also notes that cannabis-friendly adults are 36 percent more likely to suffer from back and neck pain. The report found that 65 percent of these individuals currently use over-the-counter pain meds to manage their symptoms, but 35 percent of this group were considering cannabis as a replacement for traditional medication. These findings support another clinical research study showing that many individuals who purchase cannabis products at adult-use stores are buying weed for its medical benefits, and not solely for recreational use.