By 2021, adult use or medical marijuana could be legal in all 50 states. That’s according a report by market research group Greenwave Advisors.
Already 28 states, plus Washington D.C., have gone green, while 16 states also have laws permitting CBD products.
In the last election, California, Maine, Massachusetts, and Nevada legalized weed, doubling the number of states with adult use cannabis programs. Meanwhile, Florida, Arkansas, North Dakota, and Montana, which all voted Republican, passed medical marijuana legislation.
“I’ve done {the research} state by state, looking at what’s on the table and the likelihood of a ballot initiative or legislative measure passing,” Matt Karnes, founder of Greenwave, tells Jane Street. “By 2021, every state will have some type of program, be it medical or fully legal.”
Greenwave’s research suggests that there will be 22 medical and 29 adult use marijuana markets, including the District of Columbia, within the next five years. The research also indicates that the market size will also grow from $6.5 billion, as of 2016, to $30 billion by 2021.
To arrive at his conclusion, Karnes looked at how much the average patient or consumer spends per year, projecting how more more they were likely to continue spending. Of the nearly 26.3 million medical marijuana patients, according to Greenwave’s data, the average patient spends $3,200 annually. Meanwhile, of the almost 30 million “active users,” the average adult use marijuana consumer spends about $1,500 a year.
Greenwave’s report also concludes that the government will receive $27 billion in federal income tax collections on marijuana retail sales under tax code 280E, which bars anyone who works with cannabis plant from deducting business expenses (they can only deduct cost of goods sold). The report also predicts an $18 billion “medical marijuana only” market by 2021, if Trump challenges adult use.
“If Trump succeeds in putting the kibosh on recreational marijuana, the medical market will be higher than the regular trajectory of medical now,” says Karnes. “In markets where you have a dual {adult use and medical} market, people who left the medical to go to the recreational market will go back.”
Karnes also looked at historical trends to determine which states would be next to legalize. A perfect example is Arizona, he says, where an adult use marijuana initiative failed this past election. “In 2018, they’ll likely vote again and I’m assuming it will pass,” says Karnes. “Because look what happened in Florida. It failed in 2014, and then it passed in 2016.”
Polling is also a good indicator of the way states will go. “National approval for pot is increasing and there’s a lot of data to suggest that this is going to progress in the way that I expect,” Karnes says. “But not everyone is on board with recreational, as you can imagine. I just think that medical is something that’s very likely to be available everywhere by 2021.” Around 60 percent of Americans favor legalizing marijuana, according to Pew research.
Regardless of Trump, Karnes says marijuana law reform will proceed. While there might be a short pause, ultimately more liberal cannabis policies are in store, he says, both on state and federal levels. “We’ll see what happens with Trump and if we have another administration,” says Karnes. “But I think that will definitely set the stage for movement on the federal front for sure.” If all the states do in fact legalize cannabis to some degree, federal prohibition would become an untenable, if not obsolete, policy.
