Medical Cannabis Sales Surging on Growing Acceptance
Legal cannabis is one of the hottest industries right now. That’s because medical marijuana and recreational marijuana are legal in Canada and Mexico. In the U.S., more than 35 states have legalized some form of medical cannabis and 17 states have legalized recreational marijuana.
This has helped pot stocks experience massive growth. Moreover, the outlook for North American cannabis stocks looks bright as federal U.S. marijuana legalization inches toward the finish line.
Right now, more than 40% of Americans live in a state where they can access some form of legal marijuana, with the industry expected to hit a whopping $100.0 billion in annual sales by 2030. (Source: “Welcome to the Last Illegal 420,” Forbes, April 20, 2021.)
To get there, we may need to see recreational and medical marijuana legalized at the federal level. But we’re close.
In fact, thanks to a raft of states legalizing recreational and medical cannabis (the most recent being Alabama), ongoing pressure from governors and state attorneys general could force the federal government to act.
They certainly have the voters on their side. According to the most recent Gallup poll on the topic, 68% of Americans think cannabis should be legal. (Source: “Support for Legal Marijuana Inches Up to New High of 68%,” Gallup, November 9, 2020.)
A more recent poll from Quinnipiac University puts that percentage even higher, with 70% of Americans saying marijuana should be legal. (Source: “Majority Support Stricter Gun Laws, Quinnipiac University National Poll Finds; Stark Divides On Views Of Police And Voting Issues,” Quinnipiac University, April 15, 2021.)
Any politician who saw 70% approval for anything would, you’d think, be all over it.
While there’s still work to be done, the momentum is clearly there. The House passed the Secure and Fair Enforcement Banking Act of 2021 (SAFE Banking Act) more than a year ago.
If approved by the Senate, the SAFE Banking Act will allow banks and financial institutions to lend money to marijuana companies without being prosecuted under federal law.
Should this act get enacted, the federal government will be facing even more pressure to legalize marijuana.
Some politicians who were once staunch opponents of recreational and medical cannabis have jumped on the bandwagon. John Boehner, former Speaker of the House, is now a lobbyist for the cannabis industry and is on the board of Acreage Holdings Inc (CNSX:ACRG.U, OTCMKTS:ACRGF). (Source: “Leadership Team,” Acreage Holdings Inc., last accessed June 16, 2021.)
In an April interview, the one-time opponent to cannabis said he likes to drink red wine and smoke cigarettes, “so if someone wants to light up a joint, that’s not a big deal.” (Source: “Former House Speaker John Boehner on Changing his Mind on Cannabis Industry,” CNBC, April 15, 2021.)
Boehner added, “It’s time for the federal government to get the hell out of the way.”
So there’s hope that recreational and/or medical marijuana will become federally legal in the U.S. in the next few years.
Even then, for investors, it’s important to know that there’s more to the medical cannabis industry than North America, although it’s a big market with a population of more than 371 million.
Medical marijuana is legal in many countries, including Argentina, Australia, Brazil, Czech Republic, Denmark, Finland, Germany, Greece, Ireland, Israel, Italy, Jamaica, New Zealand, Norway, Peru, Switzerland, and the U.K.
With more and more countries legalizing medical cannabis, it’s tough to get an exact figure on the global medical marijuana market. It all depends on who you ask and when the study was conducted.
No matter how you look at it, though, the growth is explosive. According to one recent study, the global medical marijuana market is projected to increase from $9.2 billion in 2020 to $27.9 billion in 2026, expanding at a compound annual growth rate (CAGR) of 20%. (Source: “Global Medical Marijuana Market Size Grow at 20% CAGR, Will Reach USD 27,988 Million by 2026: Facts & Factors,” GlobeNewswire, June 14, 2021.)
Another recent study is even more bullish, forecasting the medical cannabis market to grow at a CAGR of 25.1% from 2021 to 2028, reaching $67.3 billion. (Source: “Medical Cannabis Market Size, Share 2021 Growing Rapidly at a CAGR of 25.16% with Industry Trends, Application Outlook, Revenue, and Opportunities by Elixinol Global Limited, Medical Marijuana, Extractas,” GlobeNewswire,” May 25, 201.)
These aren’t the kinds of numbers that politicians or investors will want to miss out on.
The medical marijuana industry is experiencing massive growth. The best part is, the entire legal cannabis industry is still in its infancy. As mentioned earlier, medical cannabis sales are projected to grow at a CAGR of at least 20% over the next five years and in excess of 25% by 2028.
As such, there’s never been a better time for investors to seek out medical marijuana operators with a growing U.S. presence and plans for international growth.