Medical marijuana is now a serious $1.7 billion dollar market, according to a new report released this week by an independent financial analysis firm that specializes in new and unique markets. Currently, 24.8 million people are eligible to receive a recommendation and purchase marijuana legally under state laws, and approximately 730,000 people actually do.
Ted Rose, editor of the new State of the Medical Marijuana Market 2011 report, comments:
“Medical marijuana markets are rapidly growing across the country and will reach $1.7 billion this year. We undertook this effort because we noticed a dearth of reliable market information about this politically charged business. Hundreds of businesses exist around the country that cultivate and sell marijuana to customers. 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.”
Medical marijuana markets exist in seven states (California, Colorado, Michigan, Montana, Oregon, Washington and New Mexico) and will open this year in five more (Arizona, Maine, New Jersey, Rhode Island and the District of Columbia).
Current marijuana markets will double in the next five years. The two major drivers of growth will be patient access (the number of legal patients will rise) and regulatory clarity (states will adopt regulation and license processes that facilitate the sale of medical marijuana).
Medical marijuana dispensaries, widely popular on the West Coast, are making their East Coast debut. To the north, Maine’s first compassion center is reportedly starting business this month. Meanwhile, officials in both Rhode Island and New Jersey have announced which dispensaries will receive permits.
In New Jersey, six groups were selected out of 21 which applied. Successful applicants hope to be fully operational by late summer. They are hampered however by a policy debate over the program’s restrictive rules.
In Rhode Island, three groups have been selected from a pool of 18 applicants. The announcement concludes an unexpectedly drawn-out application process, during which all initial applicants were rejected.
The emerging markets in Rhode Island, Maine, and New Jersey will be interesting to follow, as they represent a new generation of dispensary regulations that restrict competition among providers while also limiting qualifying medical conditions. These businesses will have fewer patients to serve, but potentially greater market-shares than others around the country.
The Obama administration will not seek to arrest medical marijuana users and suppliers as long as they conform to state laws, under new policy guidelines sent to federal prosecutors last year.
Fourteen states allow some use of marijuana for medical purposes: Alaska, California, Colorado, Hawaii, Maine, Maryland, Michigan, Montana, Nevada, New Mexico, Oregon, Rhode Island, Vermont and Washington.
California is unique among those for the widespread presence of dispensaries, or businesses that sell marijuana and even advertise their services. Colorado also has several dispensaries, and New Mexico are in the process of licensing providers.
Sy Kraft, B.A.