Marijuana Investor News estimates total related product sales to be between $50 and $60 billion in the United States. In a new report released on September 26, 2014, MJIN estimates the current market size for U.S. marijuana revenue by state. The report is the first one to use actual reported revenues for both medical and adult use sales to calculate the market size.
“We want to focus the investment community on the concept that the market opportunity is not about growth but rather conversion,” said David Friedman, CEO and publisher of Marijuana Investor News, during an interview. “There is a propensity to look at market growth, which is really not correct,” Friedman added. “What we are really talking about here is a market that exists in three distinct parts. Product sales, which are legal for medical use by state, legal for adult use by state and illegal use by state. Add up all three and you get the current total market size. What’s growing is the legal market size not the actual market size.”
The report used the actual sales data through April of 2014 to calculate the market by state and created an average annual revenue projection for 2014 for both the medical and adult use market. The report then created a trending market estimated size using the most recent reported revenue for July 2014. In addition to the number used for sales, the report also calculated the current estimated black market revenue as established by a sales gap, which the Colorado Department of Revenue estimated in a July 9 report aimed at speculating market demand and tax revenue projections.
“What this does is highlight the fact that, as an investment, marijuana is unique in that you have an opportunity to invest money today at a fairly low valuation given what we know is the actual market size. Yes, the market is growing too but that’s not the opportunity. The opportunity is in moving from illegal to legal revenue and that lowers the market risk and economic risk in a very considerable way. Obviously the legislative risk is extremely high but we need to start thinking about this industry in terms of conversion of revenue before we think about revenue growth,” Friedman concluded.
This is the first report of its kind and the first of a series from MJIN. It is available in the MJINews Research Library.