How the Legal Marijuana Industry is Expected to Grow Over the Next Year

The legal cannabis industry is expected to grow significantly throughout 2019. Not only will this financial growth help build new companies, it will create jobs in local economies. Here’s a deeper look at how the marijuana industry is expected to enjoy significant growth in 2019.

Demand for Cannabis Continues to Grow

The legal marijuana industry in the United States grew to a record level of $10.4 billion in 2018, according to New Frontier Data. The industry currently employs about a quarter million people.

Global sales of cannabis are expected to grow 38 percent in 2019 to reach $16.9 billion in value, according to Arcview Market Research and BDS Analytics. With about two-thirds of U.S. states allowing legal cannabis, the industry is poised to deliver steady growth for many years. Growth will be driven by demand from both recreational and medicinal users. Global marijuana sales will reach over $31 billion by 2022, according to the report.

Several cannabis companies emerged on investors’ radars in 2018, with some stocks experiencing exponential growth. Investors are finally taking cannabis seriously as an industry, particularly now that Canada has legalized recreational marijuana.

How Medical Stories Help Pot’s Growth

The more people learn about the medical benefits of cannabis, the more positive reviews it gets. Marijuana has been criminalized for decades and must overcome attitudes and stigmas that limit its acceptance. Even within states that have legalized cannabis there are counties and cities that ban its use. As more stories of how cannabis has improved communities and lives make the news it may become more embraced as a medicine.

The main way cannabis helps patients of various illnesses is as a pain relief solution.

As pot sales soar where they are legal, local leaders and scientists will take notice as to how cannabis affects other issues in society. In 2019 New Jersey began allowing residents to use medical marijuana to treat opioid addiction. Cannabis is seen as a treatment or solution to many health conditions from depression and anxiety to chronic pain.

Several pharmaceutical and health care companies have begun exploring opportunities for mergers and acquisitions with emerging cannabis companies. Tobacco companies are starting to see a brighter future in marijuana than in tobacco and are also considering mergers with cannabis startups. Since cannabis can be consumed as an edible or a drink, food and beverage companies are also looking at buying into cannabis.

State of Marijuana Laws

Marijuana profits depend on laws allowing for its sale, which have steadily moved in favor of legalization for medical and recreational purposes. At the start of 2019 only 18 states strictly outlawed marijuana completely, meaning over half the states have decriminalized cannabis in some way. States with the most leniency toward cannabis use are California, Colorado, Oregon, Washington, Alaska, Michigan, Vermont, Maine and Massachusetts.

Challenges for Marijuana Enterprises

One of the main challenges still facing the marijuana industry is the fact that it’s still illegal on a federal level and is categorized as a Schedule I narcotic alongside heroin. This stigma and technicality causes would be players to avoid entering the market. Another major challenge is that banks remain hesitant to fund or facilitate cannabis companies until federal law is clarified. The ripple effect of federal law includes insurance companies refusing to insure marijuana companies.

Some U.S. cannabis companies have found funding solutions by listing on Canadian stock exchanges. Many major growers credit Canada’s legalization of recreational marijuana to be a major catalyst for current growth. Industry leaders are predicting that 2019 is the year that the cannabis industry shifts from theory to reality across Canada and the United States.