Various states around the U.S. are emerging from the shadow of COVID-19. While some states, notably New York, look for new high-growth businesses to invest in, marijuana has shown to be a reliable option.
Cannabis sales reached $20 billion in 2020. Additionally, it is predicted to reach $26 billion by 2021. According to Cowen and Company’s research, the legalized Marijuana industry would develop at a 20%-30% rate each year, reaching a value of $50 billion by 2026.
Patients with chronic diseases, including Parkinson’s, Alzheimer’s, Cancer, and a variety of neurological conditions, are treated with medicinal marijuana. As a result, there exists a strong argument for funding the medical aspect of the legalization issue.
This article examines the present and future potential of the marijuana industry in America.
The Value of the Marijuana Industry
As per industry research’s New Frontier Data, the marijuana sector in the United States will be worth $30 billion per year by 2025. Notwithstanding the marijuana legalization in 33 U.S. states and Washington, D.C., as well as the legalization of recreational cannabis programs in 11 U.S. states and Washington, D.C., marijuana remains federally prohibited.
The cannabis business may soon penetrate emerging markets as cannabis-legalization campaigns spread throughout the country, and some Congress members urge reforms and possibly federal legalization.
Changing Attitudes Towards Cannabis
People’s attitudes toward marijuana have shifted in recent times. That is relevant as people discover more about the medication and its apparent advantages for medicinal purposes. Once regarded as an illegal substance, it still is classified as a restricted substance by federal government regulations. However, the prejudice is vanishing at a breakneck pace, and marijuana seems to have a promising future.
A Pew Research poll found that 67% of Americans feel marijuana usage should be permitted. That is more than twice what it was in 2000 (31%). Furthermore, according to New York University research, the number of persons aged between 50 to 64 professing marijuana usage has become twice in the last decade.
Similarly, its use among individuals 65 or older has climbed seven times. As per Cowen analyst Vivien Azer, the marijuana market in the United States would produce $85 billion worth of revenue in 2030.
Change in Policy
Considering Democrats dominate both the Senate and the house, and the presidency, cannabis policy reform proponents, are optimistic that federal legislation will be passed shortly.
According to Politico, in 2019, 296 Congress members (68%) served the 33 states of the U.S. that have legalized medicinal marijuana. That implies there are enough votes to enact long-awaited legislation. Several marijuana-related proposals have already been introduced in the current Congress.
As per marijuana industry research company Viridian Capital Advisors, in 2019, marijuana firms received $116.8 billion. One may anticipate this potential to remain, but financial reform is equally crucial to the U.S. sector. Banks are presently fearful of facing money laundering penalties if they engage with these companies. Aside from the difficulties in obtaining funds, this poses significant dangers and hassles for cash-based businesses.
Joe Biden, the president of the U.S., intends to decriminalize marijuana and that people convicted of consumption of the narcotic have their criminal records wiped. Conversely, VP Kamala Harris was among Senator Cory Booker’s co-sponsors, the Marijuana Justice Act, which legalizes cannabis. Harris has indicated support for relieving marijuana charges and has advocated for a route toward legalization.
Use for Medical Purposes
Cannabis has been in use to cure ailments for years in many civilizations. The Marihuana Tax Act, which prohibits its use in the United States, was adopted in 1937. Today, there is an increasing acknowledgment of the crop as a valid choice for those suffering from medical conditions like seizures in America.
That is due to cannabidiol, a non-psychoactive natural chemical contained in the marijuana plant. It indicates that it does not cause the user to get euphoric. CBD may be found in various products, including oils, oral mists, lotions, tablets, and sweets like candies and popsicles. CBD proponents suggest that it can help with pain alleviation, stress, and depression. It has already been connected to assisting cancer patients.
Challenges Faced by the Marijuana Industry in America
The worldwide coronavirus outbreak disrupted the cannabis sector in 2021. Additionally, the industry still faces significant hurdles in 2022. Let’s look at some of them:
Constantly Changing Environment
As the sector expands, it must adjust to a rapidly changing and complicated legal environment. The issue for cannabis businesses is that distinct states in the United States, and foreign nations, have varied regulations governing the legality, consumption, marketing, and cultivation of cannabis.
Impact of Coronavirus
The outbreak hasn’t increased marijuana usage in every aspect. A study headed by researchers of the University of Michigan indicated that marijuana usage among teenagers has remained steady during the outbreak. That happened despite a record drop in observed marijuana availability.
Increasing Interest Rates
Cannabis businesses, like any other nascent company, will need to acquire financing to fund future expansion. Cannabis businesses do not have the same access to financial services as other businesses owing to their fragile legal position. This renders raising finance more difficult and expensive.
With the marijuana market anticipated to become twice in worth by 2025, several corporations have grown, mirroring the structure of well-established “mainstream” businesses.
Although it is an attractive market for new investors to explore, there are several concerns that should be considered. To begin with, there’s also a disparity in social and racial justice rules and initiatives from province to province. This tendency reflects a gap in the sector between firms committed to addressing these challenges and others that are not.