EAST LANSING – Are the emerging markets for legal cannabis products across the United States a new gold rush or will sales disappear in a puff of smoke? Two Michigan-based companies have crunched the numbers to find out.

The potential U.S. market demand—were cannabis products legal for recreational use nationwide in 2017—is $22.4 billion, according to East Lansing’s Anderson Economic Group, a business consulting firm, and Supported Intelligence, a software start-up whose algorithms were used to compute the markets of all 50 states.

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In Michigan alone, the market for legal cannabis products is more than $955 million, fifth most of any state.   

Their report, The Market for Legal Cannabis Products in the 50 United States: Second Edition, builds on a novel model developed for tracking the industry last year, which has been updated in light of election results, political momentum, new tax rates, and changing demographics. After last month’s ballot initiatives in California, Massachusetts, Nevada, and Maine, more than one in five Americans will soon live in a state with full legal status and related tax and regulatory regimes.

“There has been plenty of change in a very short period of time, leading to many false assumptions about the size and scope of the marketplace,” said Peter J. Schwartz, who edited the report, “Most of that comes from cheerleaders for the industry.” Schwartz stressed the report as the only one on the cannabis industry assembled by business economics professionals.

The report also estimates potential sales and excise tax revenue for every state (Michigan will be leaving $221 million on the table next year by not legalizing and taxing), the value for businesses in the distribution industry (ranges between $20 million and several billion, depending on the state), as well as the cannibalization of retail alcoholic beverage sales (more than $14 million in Michigan alone).

So, just how big is market demand in California, the largest state in the union and among the most recent to legalize recreational use? $3.5 billion in 2017, with another $5.1 billion in value for related businesses—more than any other state.

These totals just scratch the surface of the 265 page report, which includes an evaluation of past forecasts, legal predictions for the year ahead, and details on each market. Editors created the report with industry investors and government officials in mind, and also those interested in public and health policy.

“We are not advocates,” said Schwartz, “We’re specialists in business valuations, providing some sober analysis.”  And when it comes to this ever-growing industry, sober analysis might just be in highest demand of all.

For more information, visit: www.andersoneconomicgroup.com/CannabisReport.aspx