Wall Street Analyst Estimates US Cannabis Market Will Reach $47 Billion

For years, “$20 billion by 2020” was an oft-heard refrain from market analysts who saw a bright and prosperous future for the legal cannabis industry. Now, with that horizon fast-approaching, analysts are setting their sights on what the next decade has in store. And one analyst, RBC Capital Markets’ Nik Modi, is seeing green.

Analyst Says Concentrates and Edibles Could Propel Sales To $47 Billion Annually

RBC Capital Markets, an investment bank that’s part of Royal Bank of Canada, issued a memo to clients outlining the rapid growth of the U.S. marijuana sector. The memo, authored by Nik Modi, shows how cannabis sales in the U.S. are gaining ground on beer and wine sales.

Projecting a compound annual growth rate (CAGR) of 17 percent, Modi estimates that the legal cannabis category could reach $47 billion in sales annually in the United States within the next decade, according to Business Insider.

Yet the cannabis market in the U.S. faces uncertainties that Canada does not. Regulatory environments are constantly and rapidly shifting as states implement legalization and adopt different approaches to dealing with federal prohibition. Investing in the industry still carries risk.

But RBC Capital Markets analyst Nik Modi brushed off concerns about the unpredictability of legal cannabis in the U.S.. Instead, he drew clients’ attention to a shift in consumer trends that is already having a major impact on domestic retail markets.

Data from BDS Analytics, included in Modi’s memo, shows that the margin on cannabis flower has steadily declined since the beginning of recreational sales in Colorado in 2012. That’s indicative of a larger national move away from flower and toward cannabis edibles and concentrates.

In Colorado, flower made up 70 percent of legal sales when shops opened in 2014. By the end of Q4 2017, flower accounted for just 46 percent of total sales. Picking up the slack were edibles and concentrates. Both are surging in popularity everywhere, and Modi thinks those forms of cannabis can propel total sales beyond $47 billion a year by 2027.

Including Illegal Cannabis Sales Drastically Shifts Financial Forecasts

Another eye-catching aspect of Modi’s analysis is another BDS Analytics chart showing the estimated U.S cannabis market size. The chart compares cannabis sales to spirits, wine, cigarettes, and beer. From spirits at $58 billion to beer $117 billion, all four categories best cannabis at $50 billion. But interestingly, the chart includes total legal and illegal cannabis sales to arrive at the $50 billion figure. It’s unclear what proportion of that amount is made up by illegal sales.

Other cannabis market analysts say that illegal sales still account for the majority of total marijuana purchases in the U.S. But as legalization continues to channel consumers into the legal market, illegal sales are slowly declining.

While access to legal cannabis expands nationwide, the size of the illegal market remains difficult to measure. So does predicting how much of it will move aboveboard in the coming years.

RBC Capital Analyst Praises Big Investment in Canadian Cannabis

The letter RBC Capital Markets sent to clients also lauded Constellation Brands’ recent $4 billion investment in one of Canada’s largest medical cannabis producer Canopy Growth Corp. Constellation Brands is the firm behind the popular beverage companies Modelo, Corona and Svedka. The company has been moving incrementally into the Canadian cannabis market, upping its stake each time. Nik Modi says he’d like to see more companies make similar moves in the cannabis space.

Oklahoma Legalizes Medical Marijuana

Marijuana is now legal in Oklahoma for medical purposes.

Voters approved State Question 788 in Tuesday’s primary, which makes it legal to grow, sell and use marijuana for medicinal purposes. The law provides no outlines on qualifying conditions, giving physicians broad latitude to determine why they recommend medical marijuana to patients. Under the law, adults with a medical marijuana license would be authorized to possess up to 8 ounces of marijuana, six flowering plants and various weight of edibles and marijuana concentrates derived from the plant.

“The passage of State Question 788 highlights the strength and diversity of public support for laws allowing the medical use of marijuana,” said Karen O’Keefe, director of state policies for the Marijuana Policy Project, a drug policy reform group. “Most Oklahomans agree that patients should be able to access medical marijuana safely and legally if their doctors recommend it. It is noteworthy that this measure passed in such a red state during a primary election, when voter turnout tends to be older and more conservative than during a general election.”

Oklahoma becomes the 30th state to legalize cannabis for medical use. Legal recreational marijuana has been approved in nine states and Washington, D.C., which continues to ban sales, unlike the state programs. Despite the states’ efforts to scale back on criminalizing the plant over the past few years, marijuana remains illegal under the federal Controlled Substances Act.  

Former President Barack Obama’s Justice Department allowed states to forge their own way on marijuana policy with guidanceurging federal prosecutors to refrain from targeting state-legal marijuana operations. But in January, Attorney General Jeff Sessions rescinded the Obama-era guidance, a move that has possibly paved the way for a federal crackdown on legal marijuana. But states that have legalized medical marijuana retain some protections from federal interference under a budget rider known as the Rohrabacher-Farr amendment, which must be renewed every time Congress passes a government-funding bill.

In order to more fully protect marijuana states from the policies of federal prohibition, Sens. Cory Gardner (R-Colo.) and Elizabeth Warren (D-Mass.) introduced a bill earlier this month that would allow businesses and individuals working in the burgeoning legal marijuana industry in states around the nation to operate without fear of Department of Justice prosecution. The bill would also protect banks that work with state-legal marijuana businesses. President Donald Trump has said he will “probably” support the bill.

Marijuana is the most commonly used illicit substance in the United States, and the trend of states bucking prohibition in favor of legal regulation of the plant reflects a broad cultural shift toward greater acceptance of marijuana. National support for the legalization of the drug has risen dramatically in recent years, reaching historic highsin multiple polls. And states like Colorado, the first to establish a regulated adult-use marijuana marketplace, have seen successes that have debunked some lawmakers’ and law enforcers’ predictions that such policies would reap disaster.

State Troopers Seize $5 Million Worth of Cannabis During Traffic Stop

Some cannabis enthusiasts don’t pack light. On Wednesday evening, state troopers seize $5 million worth of cannabis during traffic stop. Here’s what happened that fateful night in Nebraska, and why weed may be harder to come by in the midwest this 4/20.

The Police Pulled Over A Van and Discovered Much More

At 5:50 pm on April 18th, the police spotted a 2017 Mercedes-Benz Sprinter from Colorado driving in the breakdown lane. They proceed to pull the van over at mile marker 36 near Geneva, Nebraska, according to 1011 Now.

After stopping the van, the K9 police unit recognized the smell of marijuana. In total, the police uncovered 1,853 lbs of marijuana, 46 lbs of hash wax and 8,779 doses of hash oil for vape pens. This ridiculous amount of cannabis is worth approximately $5 million dollars.

The Driver Is Facing Serious Charges

Nebraska and Colorado may share a border, but their marijuana policies are vastly different. Colorado is a trailblazer when it comes to the realities of legalizing weed. In the U.S., the state is a pioneer in cannabis taxation, research and even cuisine.

Surrounding states don’t share their love for the herb. After Colorado passed legalization, Nebraska and Oklahoma sued the state. They claimed that Colorado’s laws are undermining their own marijuana policy and depleting their assets. The Supreme Court threw out the case, but the disparity in policies still remains.

Though Nebraska has decriminalized marijuana to a certain extent, the police are still on high alert for marijuana possession, especially in cars with out of state plates. According to NORML, possession of up to 1 ounce of marijuana in Nebraska results in a fine. Larger amounts, however, can lead to jail time. For one ounce or less, you receive several days in jail for repeat offenses. However, these charges are only misdemeanors.

But possession of over a pound of marijuana is a felony according to Nebraska law. The sentence is five years and carries a maximum fine of $10,000.

On top of possession charges, the state is charging driver Michael Cardis of Arvada, Colorado with intent to deliver and for not having a Drug Tax stamp. The Tax Stamp law compels anyone in Nebraska to purchase a stamp from the state to label their personal marijuana supply.

The police are currently holding the 39-year-old driver in Fillmore County Jail.

Despite Legalization, There Are Still Harsh Penalties For Marijuana Possession

Though California, Colorado, Massachusetts and other liberal states have legalized recreational cannabis, not every state is moving in the same direction. Mormon leaders in Utah have come out against medical marijuana legalization.

Though Maine voted to legalize recreational marijuana in 2016, Governor LePage has threatened to veto marijuana legislation.

The Police Are Anticipating The High Holiday

This is only the latest drug bust before 4/20. Outside Greenfield, Indiana, a similar situation occurred.

The Indiana State Police pulled over a 2017 Ford Expedition when they noticed the vehicle swerving. When the authorities searched the car, they discovered 78 pounds of marijuana, valued at about $250,000.

Final Hit: State Troopers Seize $5 Million Worth of Cannabis During Traffic Stop

State troopers seize $5 million worth of cannabis during traffic stop in an attempt to curb the tide of marijuana seeping into surrounding states from Colorado.

This massive drug bust worth about $5 million dollars will seriously short Nebraska’s weed supply just two days before 4/20.