The U.S. Cannabis Industry: Recaps and Forecasts
The U.S. cannabis industry has shown impressive resilience amid the economic uncertainties experienced in 2022. With additional states expected to legalize the medical and recreational use of cannabis, the industry is poised for significant growth in the coming years. Research by Brightfield Group estimates that the U.S. cannabis market will hit over $31.8 billion in annual sales by the end of 2023 and grow to $50.7 billion in annual sales by 2028.
Keep reading for key market insights for 2023 and beyond!
2022 U.S. Cannabis Industry Statistics Recap
- S. cannabis sales reached $27 billion.
- 64% of U.S. adults were familiar with CBD and CBD products.
- The medical segment registered 77% of the total cannabis revenue.
- When we break the market down by derivatives, CBD was the clear winner, boasting 65.5% of the market, with “Others” (CBG, CBN, CBC, etc.) coming in at a distant second, and our old pal, THC coming in at dead last.*
- Seven state markets opened the sale of cannabis (Montana, New Mexico, New Jersey, Vermont, Rhode Island, New York, and South Dakota).
- The state of California—the OG of legal cannabis—remained supreme as the world’s leading cannabis market.
U.S. Cannabis Industry Forecast for 2023 and Beyond
Researchers predict the U.S. cannabis market will reach over $31.8 billion in sales in 2023. Here are more specific market insights for this year and beyond:
- Experts predict that the Western region of the U.S. will experience an increase in cannabis adult-use sales from $11.5 billion in 2022 to $15.3 billion by 2028. Medical cannabis use will shrink from $2.3 billion to $2 billion within the same period.
- A handful of new legalization efforts will likely lead to growth in the Midwest region market. Missouri officially legalized recreational cannabis in December 2022, while Ohio, and Minnesota and Kentucky all have new legalization efforts likely to succeed.
- Both Missouri and Connecticut began recreational cannabis-use sales at the beginning of this year. Connecticut’s expected recreational cannabis sales in its first year are near $180 million, while Missouri’s could reach up to $444 million.
- Maryland is set to kick off recreational cannabis sales in July 2023.
- In the Southern region of the U.S., medical market openings will drive growth while analysts predict that the recreational market will remain limited. It’s still the South, after all.
- Experts predict that the number of cannabis users in the U.S. will increase by 4% each year over the current decade, reaching about 71 million users in 2030.
Cannabis Market Growth by Segment
If you’re just now joining us, we’ll break it down for you. The cannabis market is divided into two major segments: medical and recreational. The distinction between the two is, for all intents and purposes, a purely legal one. Customers in medical regimes are required to have a physician-administered license, while recreational customers need only be 21 years of age. There is also the question of the legal hemp market and the associated explosion of interest in psychoactive derivatives like Delta-8, but researchers have yet to catch up with those trends sufficiently to provide satisfactory analysis.
Available data suggests the U.S. medical cannabis industry will expand at a compound annual growth rate (CAGR) of 46.5% between 2023 and 2028 to reach a value of around $16.36 billion by 2026. The factors expected to drive this growth include:
- The rising population of elderly patients who are more vulnerable to chronic diseases and looking for alternative treatments
- The growing number of clinical trials and R&D projects and the increased commercialization of cannabis
- Growing consumer awareness
- The leading applications of medical cannabis are for chronic pain, mental conditions, and cancer, while the most common products are buds, oils, and tinctures.
- Recreational cannabis use is showing rapid growth. In 2022, the sales of recreational cannabis reached $21.1 billion, with market projections showing that sales could reach $25 billion by 2025.
- The U.S. sales of recreational cannabis in 2022 contributed to 64% of the total spending on legal cannabis globally, and that rate could rise to 78% by 2027.
- The key drivers of growth to watch are California, New Jersey, and New York.
- One major factor that has led to the growth of the recreational cannabis industry is the variety of product options in the market. More and more players are meeting consumer demand with a wide range of products, including flowers, edibles, beverages, vape cartridges, and more.
The U.S. Cannabis Industry Employment Projections
In its annual jobs report for 2022, Leafly named the cannabis industry ‘“the most prolific job creator in America”—and for good reason.
- The cannabis industry created 428,059 jobs in 2022.
- 2022 marked the 5th year in a row by which jobs in the cannabis industry grew by over 27%.
- California’s cannabis market employed 83,607 Americans.
- The estimate for total employment potential in a mature legal cannabis market in the U.S. is around 1.5 to 1.75 million workers.
- With the projected growth, the cannabis industry will create more job opportunities in a growing number of peripheral markets and trades, including web development, graphic design, human resource, regulatory compliance, security, accounting, cultivation, and retail sales.