The cannabis industry in the U.S. could reach $45.8 billion by 2025 with compound annual growth rates (CAGR) between 2-8% annually, according to Headset, a cannabis industry data and analytics firm.
“The opportunities presented in the U.S. cannabis market have been consistently increasing year over year since the inaugural states of Colorado and Washington voted in 2013 for legalization,” the firm’s recent “Cannabis sales projections for US markets in 2025” report states. “Despite the piecemeal approach we have seen in new states approving and implementing adult-use cannabis markets, we are seeing synergies within regional approaches and established operators improving scalability across distinct cannabis markets. With public support increasing for advancement in medical and recreational cannabis, we expect to see the total addressable market in cannabis continue to increase.”
The report predicts that, by 2025, Florida will be the nation’s second-largest market behind California with $3.2 billion in total sales, and New York will be the third-largest market with $2.8 billion in sales.
“With the earliest adult-use licenses expected to be issued in 2023, New York is undeniably one of the most exciting cannabis markets on the horizon,” the report states. “Representing a booming 21-plus population expected to exceed 15 million in 2025, New York is home to one of the most advanced illicit cannabis industries in the world.”
Further, the report suggests that New Jersey and Virginia, both newly legal states that will have similar populations of individuals 21-and-older by 2025, will produce $1.6 billion and $1.3 billion, respectively, in sales.
Interestingly, the company notes Ohio as an emerging market, predicting sales of $1.6 billion by 2025 despite recently stalled legalization efforts.
“Ohio has established itself as one of the most exciting emerging cannabis markets in 2021, and we only expect the opportunities in this market to accelerate,” the report states. “By 2025, census data is predicting that Ohio will present a massive addressable market of 8.8 billion potential adult-use consumers over 21-plus. It is no wonder that we are seeing an ever-increasing call for cannabis legalization in the Buckeye state.”
Headset called Ohio a “hopeful contender” for legalization in 2022 with several active campaigns amassing signatures in support.
“By 2025, we are hoping to see the Ohio market actualize a majority of its potential and post annual combined sales over $1.6 billion, slightly more than New Jersey given its extensive population and expanded licensing.”