The coronavirus pandemic was a defining factor in 2020, but the cannabis industry continued to report record highs throughout most of the year despite the pandemic crippling other industries. Most states deemed cannabis as an essential business and as an important sector of the U.S. health care system, allowing cannabis businesses to remain operational.
2020 was an important year for cannabis and the growth the industry experienced is poised to continue throughout 2021. Here’s what to expect in the year ahead from the strongest emerging industry in the U.S.:
NEW CANNABIS BUSINESS OPPORTUNITIES
During the November 2020 general election, cannabis saw another win as five states and several cities and counties throughout California legalized cannabis for medical and/or adult-use markets. Arizona, New Jersey, Montana and South Dakota legalized adult-use cannabis and Mississippi and South Dakota legalized medical cannabis.
On December 11, Arizona released draft regulations for the state’s new adult-use market. According to the draft, the majority of the adult-use cannabis licenses in the state will go to the roughly 120 existing medical cannabis businesses that are currently operating in the state. Roughly 12 will then be available in underserved and rural communities, according to state regulators.
The drafted rules also state that the non-refundable application fee for adult-use dispensaries and testing facilities will be set at $25,000. State officials anticipate the regulations to be completed and finalized in time for the first application process that begins on January 19, 2021.
The Arizona adult-use market could generate as much as $375 million - $400 million in its first year and $700 million - $760 million by 2024, according to projections by Marijuana Business Daily.
Lawmakers in New Jersey have been working on a bill that will establish regulations for the new market before the constitutional amendment takes effect on January 1. Once operational, the state could reach up to $950 million by 2024.
New Jersey’s legalization has put pressure on neighboring states such as New York and Pennsylvania to legalize adult-use cannabis markets.
MORE STATES WILL LEGALIZE CANNABIS
Cannabis was already the nation’s fastest growing industry, but 2020 took it to another level. A record-high of 68% of Americans now support cannabis legalization, making it clear that cannabis is set to become a major staple of American life.
The demand for cannabis products surged to unprecedented levels during the pandemic as nearly every state market saw record sales throughout the year. In fact, cannabis sales have increased every year in states where it is legal, and each year that list of states gets longer.
The cannabis industry is poised to expand into several new markets in 2021. New York Gov. Andrew Cuomo recently renewed his vow and released his plan to legalize cannabis in the state, which could help offset the economic fallout from the pandemic and give way to the state becoming one of the U.S. biggest markets in the next few years. According to Gov. Cuomo, legalization could lead to 60,000 new jobs, $3.5 billion in economic activity and $300 million in tax revenue.
Connecticut, Pennsylvania, New Mexico and Rhode Island will also likely discuss legalization in their states. Pennsylvania Governor Tom Wolf has called for legalization to help with state revenue, and New Mexico Governor Michelle Lujan Grisham plans to introduce adult-use legislation in a third attempt to bring legalization to the state.
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