After the pot industry's smokin' 2016, what's next?
The past year sure pushed the marijuana industry to new highs. Sales in North America grew 30 percent to $6.7 billion and are forecast to rise at an annual rate of 25 percent through 2021, according to market researcher Arcview Market Research. At that point sales will reach more than $20 billion.
But that pleasant future could get extinguished like a joint in the rain if the industry’s worst fears of what could happen under the incoming Trump administration come true.
As things stand now, about 21 percent of Americans live in states where weed can be bought, though it’s still technically illegal under federal law. A whopping 60 percent of respondents in a 2016 Gallup poll said they support legalization. That’s the highest support the firm has measured in the nearly five decades it has asked this question.
Pot even beats President Obama’s popularity: Roughly 54 percent of Americans say they think the outgoing Commander-In-Chief is doing a good job.
“Spending in the largest three adult-use markets (Colorado, Washington and Oregon) was up 62 percent through September after doubling in 2015. That growth was fueled in large part by the sudden popularity of alternative ingestion methods such as edibles and concentrates,” said Arcview Editor-in-Chief Tom Adams in a press release.
And during the same election in which voters put Donald Trump in the White House, those in California, Maine, Massachusetts and Nevada agreed to permit recreational use of marijuana, doubling the states where that use is allowed. Arkansas, Florida, Montana and North Dakota joined the more than two dozen that allow medical cannabis use.
These new markets are included in Arcview’s estimates, though their impact will be minimal at first because it takes a few years for markets to develop.
But then there’s President-elect Trump. His pick for U.S. attorney general, Alabama Republican Sen. Jeff Sessions, has been critical of cannabis legalization, calling it a “tragic mistake.” Sessions has also said that “good people don’t smoke marijuana.”
Trump, though, has expressed support for medical marijuana and has said its regulation should be left to the states. A spokesperson for the Trump transition team didn’t respond to a request to comment for this story.
“I’m not sure the Trump administration won’t crack down. But I think it’s highly unlikely that they will go after the industry,” said Arcview CEO Tom Drayton in an email. “Also, cannabis did better than Trump at the ballot box, even in many states he won. This issue is popular among his base. It would be political suicide for Trump to go back on a campaign promise on a hugely popular issue.”
Still, the marijuana industry can’t afford to be complacent, according to Drayton.
“Much about the political climate doesn’t make sense right now, and we have almost no idea how Trump and Sessions will govern,” he said. “So, anything is possible.”