EAST LANSING —According to Anderson Economic Group’s monthly AndCan®Index, demand for legal cannabis products in the United States remained flat in September. This monthly measurement closely follows trends across all 50 states for both the recreational and medicinal markets, based on benchmarks developed when AEG began assessing the market in 2015.
Through July, the legal cannabis market showed uninterrupted growth for the year. That month-over-month trend was bent (though not broken), when demand flattened out in August and September. Strong growth is still indicated year-over-year, with a rate of 16.3%.
Once again, AEG’s Kenan Cosguner believes this longer-term growth trend will continue to hold. In spite of the slightly softer August and September numbers, demand is expected to increase through the end of 2019 and into 2020. “The pace of that growth may be somewhat slower than it was earlier this year,” says Cosguner, “but the historically upward trend will receive an additional lift as new markets open.”
Patrick Anderson, AEG’s Principal and CEO, strikes a note of caution regarding rosy estimates of sales and tax revenues: “Recently legalized states have relied on overly-optimistic projections, with California misjudging demand by over 50%.” Newly open markets such as those in Michigan and Illinois are particularly prone to this error, leading Anderson to suggest that “we would be wise to evaluate lofty figures with a critical eye.”
About the AndCan Index
Launched in June 2017, the AndCan®Index reflects observed demand from U.S. states that have legalized cannabis, and estimates latent demand in states where data on observed demand are unavailable. The National Association of Business Economists recently recognized the superior quality of this work by awarding Patrick L. Anderson a 2019 “Best Contributed Paper” award for the manuscript “Blue Smoke and Seers: Measuring Latent Demand for Cannabis Products in a Partially Criminalized Market.” This paper, soon to be published in the journal Business Economics, documents the methodology and challenges faced in development of the AndCan®Index.
The AndCan®Index builds upon:
- Three years of comprehensive coverage of the U.S. legal cannabis market and assessments of demand by Anderson Economic Group;
- A rigorous methodology that has been presented in award-winning technical papers at two professional economics conferences; and
- More than two decades of business consulting experience worldwide.
Comments from other professional economists have been incorporated into the AndCan®Index, as has additional research by Anderson Economic Group consultants.
In March 2019, Anderson Economic Group released the 2019 benchmarked AndCan®Index, which included a number of methodological and data improvements. They added data for a number of states that were not included in the original index, and updated the AndCan® methodology to take advantage of new data.
About Anderson Economic Group
Since its founding in 1996, Anderson Economic Group has become one of the nation’s premier boutique consulting firms, specializing in business valuation, expert testimony, and public policy. AEG has assisted governments, universities, large corporations, and businesses across the U.S. and abroad. All of the firm’s work is based on the core values of professionalism, integrity, and expertise.
AEG has offices in East Lansing, Michigan and Chicago, Illinois.