Marijuana sales set to soar in the US

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An analyst for Canaccord Genuity increases his outlook on the future

The picture of US cannabis growth is beginning to come into focus and analysts are taking notice. According to Bobby Burleson of Canaccord Genuity, things are going to be better than previously expected and he has revised his outlook on the projected compound annual growth rate (CAGR) for the industry. While it wasn’t much of a shift, raising the forecast from 19% to 20% still equates to major money.

The retail sales industry of cannabis is expected to reach $22 billion by the year 2022, according to Canaccord. With the new revision, Burleson expects this year to bring in at least $12.8 billion, making it a solid investment.

The reason for the revision came after Illinois recently legalized recreational marijuana, which is expected to take effect next year. Burleson explains, “With recreational sales set to kick off next year, we are increasing our state estimates to $488 million in 2020 from $277 million, $734 million in 2021 from $342 million and $987 million in 2022 from $395 million to reflect the anticipated ramp.”

Improvement in Massachusetts is expected, as well. Burleson points out that the industry in the state is picking up and says, “In April and May, monthly retail sales exceeded $30 million and as of May the state is on a run rate of more than $400 million in annual [recreational] sales.”

If New York and New Jersey had ratified marijuana legislation, the outlook could have been even higher. This isn’t a killer for the industry, though, and the analyst expects 2020 to be the year for New York. He explains, “We are now forecasting initial recreational sales in New York coming in 2022. We have reduced our 2019 and 2020 estimates from $458 million and $604 million to $261 million and $265 million respectively.”