The North American cannabis industry continues to grow, and the rate of expansion could accelerate further if banking and energy-supply issues can addressed, according to a new report.
According to Inc., combined medical and recreational sales in the U.S. exceeded $5.4-billion last year, compared with $4.6-billion in 2014. In 2016, sales could hit $6.7-billion. Those numbers are based on the State of Legal Marijuana Markets report co-released by by ArcView, a cannabis research firm, and marijuana big data and analytics company New Frontier.
And the industry is poised to grow much larger in the next year. Twenty-three states have already legalized medical cannabis and four have legalized recreational. In 2016, California, Arizona, Maine, Rhode Island, Ohio, Pennsylvania, Massachusetts, Nevada, and Vermont could take steps to legalize through ballot initiatives and votes in state legislatures. Florida, Ohio, Missouri and Pennsylvania will also vote on medical marijuana laws.
Industry still faces challenges with banking, electricity
Yet despite rapidly-evolving attitudes, financial institutions remain leery of providing services to companies that actually touch the plant, with only 30 percent of such companies possessing a bank account. Meanwhile, just over half of ancillary businesses (e.g. marketing, packaging, and security) were able to secure banking.
Tim Cullen, CEO of Colorado Harvest Company, told Marijuana Business Daily last month that he had 14 different accounts in six years. "Just this past month a bank….closed my personal accounts after a 10-year banking relationship," Cullen said. "They even closed my three-year-old son's college savings account."
There's also room for innovation in the area of electricity consumption. Indoor growing operations consume as much as 1 percent of the nation's electricity "To put that into perspective," writes Will Yakowicz of Inc., [that] is equivalent to 1.7 million homes and costs $6-billion a year." It's clear that producers of America's most energy-intensive crop are ready for a greener solution that continues to feed a growing, power-hungry industry.
Despite the issues, the overall trajectory is up: the report predicts nation-wide sales could reach $21.8-billion by 2020.