The latest gaze into the crystal ball puts the U.S. marijuana industry north of $24 billion by 2025.
New Frontier Data, a cannabis market research and analytics firm, gave The Cannabist a first look at its 2017 annual report, which aims to track the long-term potential for the industry. The report acknowledges external factors such as federal rescheduling or a full-scale crackdown could shake up the near-term.
By mapping out state-by-state sales to $24.5 billion in 2025 and projecting that cannabis industry employment could top 255,000 jobs within three years, New Frontier hopes to show that cannabis is not “just a flash in the pan,” said John Kagia, the firm’s executive vice president of industry analytics.
“It’s very hard to look at both the numbers and associated economic dynamics and envision that this genie could be put back in the bottle,” he said.
Such prognostication should be approached with a fair share of caution, some industry analysts and economists have said.
This nascent industry is jam packed with unique factors, including varying regulations, disparate markets and lacking longitudinal data. So making predictions for eight months out, let alone eight years out, is a daunting — if not impossible — exercise, said Andrew Livingston, director of economics and research for cannabis law firm Vicente Sederberg LLC.
Livingston noted two quick calculations he made for Colorado sales in 2017: one using a linear extrapolation of sales data going back to 2014 and the other using average year-over-year growth rates. The resulting numbers of $1.618 billion and $1.783 billion, respectively, were about $165 million apart.
“This is a fast-paced, changing market with varying different dynamics that have more to do based on governmental and regulatory dynamics than they do on consumer dynamics,” Livingston said.
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