According to data from ArcView Market Research and New Frontier Data, Washington’s legal cannabis industry could be worth $2.4 billion by 2020; however, those sales remain at the expense of patients after the state folded the medical program into the adult-use infrastructure.
The multi-billion dollar estimate would represent a doubling of the current $1.2 billion market at an annual growth rate of 23 percent, the analysts say.
“The Washington market is maturing, but it has a long way to go to reach saturation. It will practically double by 2020,” ArcView Group CEO Troy Dayton said in a press release. “People really like cannabis and the regulated market is beating the underground market, as predicted.”
The state’s adult-use market has been in operation for two years and has developed and grown quickly. In 2014, the average monthly sales were $10.8 million, which climbed to $51.2 million in 2015 and doubled to more than $111.6 million this year. Under the new program, though, medical cannabis patients are also required to pay the 37 percent excise tax on cannabis, which will drive up sales figures but also the costs for patients. The state has also increased the number of retail licenses available from 334 to 556.
“Over the past 18 months, Washington has undergone some of the most dramatic changes to any regulated cannabis program in the country, from lowering the tax rates to consolidating the medical and adult use markets into a single channel,” Giadha Aguirre DeCarcer, New Frontier Data CEO and founder, said in the release. “These changes are intended to streamline the market and eliminate structural inefficiencies. However, it will be at least another year before we understand their full impact on product supply and consumer behavior.”
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