There has been a new report on the cannabis industry released recently by an investment bank called Cowen and Company, which has been on the market for almost one century. The team was made of 10 analysts, each of them specialized in a different branch of the cannabis industry, so the effort was very broad.
The report suggests that the legal cannabis industry could grow to $50 billion by 2026, which is a nine-fold increase from 2016. There are 25 states in the US approving marijuana use with doctor’s permission and 4 for recreational use. There are 9 states waiting to vote to legalize cannabis use in November. Moreover, the cannabis industry is gaining legitimacy through investment from Microsoft, Scotts Miracle Gro or Peter Thiel. Therefore there is a high probability of further growth in the industry.
“A 24 percent, 10-year revenue compound annual growth rate is hard to find in consumer staples, in particular one with a $50-plus billion end-point,” Cowen said.
The growth of the industry will positively affect the tobacco companies with e-cigarette technology. The lead analyst Vivien Azer expects Big Tobacco (the five largest tobacco industry companies) to double their revenue growth in the following 20 years, partly thanks to the cannabis industry. She also mentioned that companies providing rolling papers and vaporizers will flourish in the next decade. On the other hand, alcohol producers are threatened by the growth in the cannabis industry, since cannabis is often perceived as a substitute for alcohol.
Retail specialists on the team, Charles, Chen, and Kopelman, predict 17 000 cannabis retailers upon legalization. With emerging technologies, there is a bigger space for online content creators, online shopping, delivery services, online media evaluations and fast-food retailers. They expect beauty supply chains to expand as well, since cannabis has a huge potential in the cosmetics industry.