The legal marijuana industry in the United States employees a massive number of people, according to a new report.
According the 2017 Marijuana Business Factbook released today by Marijuana Business Daily (MBD), the legal marijuana industry employees between 165,000 – 230,000 full and part-time employees. “To put this in perspective, there are now more marijuana workers than there are bakers or massage therapists in the United States,” states the report. There are also more marijuana workers than dental hygienists.
The report found that retail sales of medical and recreational cannabis in the United States “are expected to hit $5 billion-$6 billion this year and surge to as high as $17 billion by 2021”. According to MBD, the rapid rise of the recreational market, legalization in new states and further development in existing MMJ programs will spur much of that growth.
“The marijuana industry is primed and pumped for explosive growth in the foreseeable future, provided there isn’t a significant crackdown at the federal level,” said Chris Walsh (below), editorial director of Marijuana Business Daily. “The business opportunities that will emerge in the coming years are tremendous for both existing marijuana companies and new ones that start up.”
Sales in 2017 are expected to grow by roughly a third over the estimated $4 billion-$4.5 billion the industry racked up last year, with recreational possibly surpassing medical for the first time.
Recreational cannabis shops are expected to generate $2.6 billion-$2.9 billion in sales this year versus $2.5 billion-$3.2 billion on the medical side, according to the Factbook. The recreational market will benefit from Nevada’s launch of early adult-use sales in July, continued strong growth in Colorado, Oregon and Washington state, and momentum in Alaska’s new recreational market.
Other highlights from the 2017 Marijuana Business Factbook:
- Roughly 50% of revenue-generating cannabis companies are either actively trying to raise capital or plan to this year. The situation for these businesses can vary – some are looking for capital to expand while others need cash infusions to pay the bills until they hit profitability – but a higher percentage of testing labs and infused product manufacturers are seeking funding than all other sectors of the industry.
- With average profit margins of 19%, dispensaries and rec stores are doing quite well in terms of profitability. Though such margins are high relative to businesses in the traditional economy, retailers actually have the smallest profit margins across all sectors of the marijuana industry.
“Given that annual revenue for a typical rec store/dispensary is nearly twice as high as their operating costs, retailers are obviously hindered by their inability to take the same tax deductions as a traditional business,” said Eli McVey, industry analyst at Marijuana Business Daily. “Should future tax code reforms address this issue, expect to see retailers’ profits surge.”
- A majority of infused product companies are manufacturing more than one type of good – typically edibles and concentrates – though less than a quarter are choosing to focus on a single category. For example, nearly half of all infused businesses are producing topicals, but only 6% are manufacturing topicals exclusively.