You’ve heard it before. The cannabis industry is going through a shakeup, and to no one’s surprise, 2023 is off to a rocky start. We’ve witnessed the first, but not last, adult-use dispensary permanently close its doors in Massachusetts. Public cannabis companies are reporting enormous operating losses. Vendors are struggling to get paid in a timely manner, leading to laborious collection efforts. Across the country, concerned creditors are enforcing remedies by initiating state court receivership proceedings upon their debtor operators. Common sense federal legislation aimed at alleviating the unjust economic obstacles facing cannabis businesses continues to be ignored by the majority of Congress. And the list of woes goes on. No doubt, our entire cannabis ecosystem is, and has been, working through its first major downturn.
But there is always plenty to look forward to. The industry will readjust and reshape itself to meet market conditions and inevitably bounce back in its own time and in its own way. One of the side effects of working in an industry that has grown out of its infancy and into adolescence is the increased availability of data related to the cannabis economy and culture. This data leads to several findings that give me hope and reiterate my passion for serving this industry.
Here are a few. I encourage you to share any of your own findings in the comments to this blog or feel free to email me directly.
- Undercut Cigarette Use – I am a proponent of personal autonomy as long as it doesn’t materially interfere with another’s freedoms. So, please, do not take this as a condemnation of cigarette use. But cigarette use is medically proven to shorten one’s life and cause a host of medical issues. The legalization and normalization of cannabis use have coincided with a reduction in the number of young adults who pick up tobacco use as a hobby, with data showing that young adults are now more likely to try cannabis than to try a cigarette. The data does not read that cannabis use has directly caused a decline in cigarette use; however, the trend is interesting nonetheless. I’ve witnessed this firsthand with my younger cousins, who think cigarette use is unproductive but have no problem sparking a joint with their friends and colleagues.
- Economy Boom – According to analysts, the cannabis market could be worth up to $100 billion by 2030. Other analysts lowball that number to be at least $57 billion. In either case, these estimates far exceed the initial predictions for 2030 made in previous years. And with new states legalizing medical and adult use markets with each election cycle, growth is expected to be exponential rather than linear. These are merely projections, not guarantees, but it is astounding the amount of revenue generated by the cannabis markets in such a short amount of time, so I am not counting anything out. Remember, I am a lawyer and an optimist, not an analyst or economist.
- Cannabis Taxes – No one likes paying taxes. But a modest tax on cannabis purchases is providing states with a monumental stream of new tax revenue. These taxes help elevate the standard of living and increase the services provided to state residents. In 2022, California collected the largest amount of taxes at $774 million, followed by Washington ($517 million) and Illinois ($466 million). The top 12 states collected more than $3 billion in cannabis-related taxes in the aggregate. Subject to the competence of state legislators, this money can be used to change the lives of residents of the state through improved education and secondary education, modernized infrastructure, and assistance programs that mitigate the disparity of opportunity prevalent in many communities.
- Employment – The cannabis industry employs over 420,000 people. This provides people with community, income, education, and dignity. So many headlines these days reference job creation. Well, here you go, folks, plenty of opportunity.
- Beverage Popularity on the Rise – This one might be unique to me, but cannabis beverages are a clean and enjoyable method for consuming cannabis, and for yet another consecutive year, the popularity and use of cannabis beverages are on the rise. Highly recommended for a day at the beach or on the golf course.
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