Legal Weed Sales Are Expected to Exceed $43 Billion in the US by 2025
The US legal cannabis market could rake in $25 billion this year, and annual sales could grow to nearly double that figure by 2025.
Published on August 16, 2021

By 2025, America's adult-use and medical cannabis retailers could be selling more than $40 billion dollars worth of legal weed a year, according to a recent report by New Frontier Data.

2020 was an absolute banner year for the US legal weed industry, largely thanks to the pandemic. People began flocking to their local dispensaries as soon as the lockdown began, stocking up on weed to help them beat the stress and boredom. This massive demand helped most legal-weed states break monthly or yearly sales records, and the industry as a whole raked in around $20 billion in sales by year's end.

Now that many people have returned to the office and unemployment benefits are drying up, industry analysts have been wondering if this year's sales might dip back to 2019 levels. A quick look at monthly sales figures shows that this is definitely not the case, though. In the first two quarters of 2021, legal pot shops moved an estimated $11.9 billion worth of product.

If sales continue at this same pace, the US cannabis industry is on track to top $24.93 billion by the end of 2021. And now that Connecticut, New Jersey, New Mexico, New York, Vermont and Virginia are all working to open adult-use markets within the next three years, analysts predict that sales will continue to grow exponentially.

New Frontier is predicting that legal weed sales will grow at a compound annual growth rate of 16% over the next five years, eventually reaching nearly $43 billion by 2025. Out of these total projected sales, 62 percent ($27.4 billion) is expected to come from state-legal adult-use markets, while the remaining 38 percent ($15.5 billion) will come from medical marijuana sales. By 2025, there could be as many as 5.4 million registered medical cannabis patients in the country, accounting for nearly 2 percent of the entire US population.

Even with this impressive growth, legal sales still have a long way to go to catch up to the black market. Last year, Americans bought an estimated $66 billion worth of black market weed, accounting for 76 percent of all pot sold in the US. By 2025, illicit weed sales are predicted to shrink to under $60 billion a year, but even so, the black market will still be capturing 58 percent of the country's total annual cannabis sales.

There is one important factor that could totally change these predictions, though. Congress is currently debating two separate bills that would end the federal prohibition of cannabis once and for all. Passing either of these bills would remove restrictions blocking state-legal pot companies from opening bank accounts, engaging in interstate commerce, or listing on the US stock market. If this unprecedented reform were to succeed, it might just push the US weed industry well over the $50 billion mark.

Chris Moore
Chris Moore is a New York-based writer who has written for Mass Appeal while also mixing records and producing electronic music.
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