It is no secret that cannabis is one of the hottest investment trends of the current Wall Street generation of investors. Although the sale of these treated plants is not a commercial innovation, the black market in global cannabis sales earns tens of billions of dollars. There is a reason to believe that cannabis sales look promising but there are some things to watch for as forecasts predict.
Since 1996, two-thirds of U.S. states have given the green light to medical cannabis, with 11 of them legalizing adult cannabis use. As such, cannabis sales forecasts noted that this industry is still destined to boom.
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Cannabis sales forecast predicts that Europe will become an industry leader by 2024
Although all investors are now concentrated in the North American market, Prohibition Partners predicts that Europe will outpace North America in terms of total cannabis revenue by 2024.
Europe will earn $39.1 billion in cannabis sales and North America will earn $37.9 billion. On the one hand, experts consider the U.S. and Canada to be more experienced in terms of industrial legalization.
On the other hand, there is more population in Europe, which will play a greater role in promoting cannabis sales in comparison to North America.
After 2024, the legalization of recreational use may begin in European countries which will lead to even greater sales.
Sales of medical cannabis will exceed the revenues from recreational cannabis
Not only will Europe outperform North America in sales, but revenues from cannabis will easily exceed recreational sales within the $62.6 billion margin compared to $41.3 billion.
Although the recreational hemp market is much larger than the medical market, in five years’ time there will not be too many legal markets in the world for adult cannabis users.
Such sales will bring approximately $17.7 billion to North America and $16.8 billion to Europe, accounting for 84% of global recreational sales by 2024.
European adult cannabis sales are likely to start growing in the second half of the coming decade.
The U.S. will legalize recreational cannabis at the federal level by 2024
Another shocking prediction is that the United States will legalize recreational cannabis by 2024.
Although 33 states have legalized some form of cannabis for recreational and medical use at the federal level, the implementation of such a prediction will require a significant change of staff in Congress.
Republicans tend to avoid cannabis reforms in the United States and they now control the majority of the Senate.
Moreover, Senate majority leader, Mitch McConnell, is deliberately blocking cannabis supporters from voting for House of Representatives proposals.
In short, the U.S. would need a real jolt in Congress to legalize marijuana at the federal level.
Cannabis sales forecast predicts black market problems
Finally, it is worth paying close attention to how these experts make their forecasts, especially with respect to the black market.
“Our recreational market sizes do not include the black market. If the country has not yet legalized recreational cannabis, the value of such a market is zero. In the case of legalization, the corresponding growth curves are applied to the legal market in the long run, limiting it to a maximum of 60% of the value of the entire recreational market (including to black market).”
Note the part “limiting this market to a maximum of 60% of the value of the entire recreational market.”
In this bizarre way, the expert group argues that it does not believe that a significant portion of the illicit market will be squeezed out. In other words, at least 40% of all sales should remain on the black market.
Indeed, the inability to supplant illegal producers is particularly noticeable in the state of California, where consumers are taxed up to 45% for legal products.
Given the fact that almost 80% of the state’s municipalities have banned recreational retail stores, it can be said that local authorities have almost rolled the red carpet out for the black market.
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