by Phillip Smith
The size of the US medical marijuana market is $1.7 billion, and that figure is likely to increase in coming years, according to a new report from See Change Strategy LLC, an independent financial firm. An executive summary of the report, The State of the Medical Marijuana Markets 2011, is available at MedicalMarijuanaMarkets.com.
"Hundreds of businesses exist around the country that cultivate and sell marijuana to customers," said report author Ted Rose in a statement. "Many of these businesses emerged in the wake of the Obama administration's decision to deprioritize federal prosecutions of individuals and business complying with state medical marijuana laws. The State of the Medical Marijuana Markets 2011 shows which states represent the most active markets, who is making money, and how are they doing it."
Although 15 states and the District of Columbia have medical marijuana laws, sales of medical marijuana through retail outlets are currently legal in only seven of them (and only arguably legal in some of those). But four more states and DC are expected to begin medical marijuana sales this year, the report said. Between expansion of the number of locales where medical marijuana is sold, increases in the number of patients taking advantage of medical marijuana laws, and increasing regulatory clarity, the market is set for further growth, Rose said.
"We predict that the current markets will double in the next five years," he said in a Wednesday conference call. He estimated that the size of the medical market will reach $8.9 billion by 2016.
The report found that one in four Americans live in medical marijuana states and that nearly 25 million could currently qualify as medical marijuana patients. Only about 730,000 are currently doing so.
In a sign of a maturing industry, Rose said medical marijuana business operators were more worried about regulations and obtaining financing then they were about competition or getting busted. He said that 90% of operators saw medical marijuana as a growth industry.
The study was conducted over the course of eight months and consisted of surveys and interviews with about 300 businesses in the medical marijuana industry.