- The demand for legal cannabis products in the U.S. increased by 1% in February.
- Cannabis product demand is up 3.2% from four months ago.
- The AndCan Index is constructed using calculations for all 50 states.
FOR IMMEDIATE RELEASE
EAST LANSING, MI—May 8, 2018—The demand for legal cannabis products in the United States increased by 1% in February 2018, according to the monthly AndCan Index, which closely monitors demand across every U.S. state. The increase marked the fourth consecutive month of growth for the AndCan Index.
AndCan Index data shows that the demand for legal cannabis products has grown by 26.9% nationwide since the start of 2015. Since the November 2016 election, when four states—Nevada, California, Massachusetts, and Maine—voted to legalize recreational use of marijuana, overall U.S. demand has increased by 13.3%.
Support for legalizing marijuana is at an all-time high. According to the Pew Research Center, six-in-ten American adults believe marijuana should be made legal. “Rising demand for cannabis products comports with trends in public opinion on marijuana legalization,” said AEG consultant Traci Giroux, who oversees the AndCan Index. “Sustained growth over four consecutive months signifies the strength of the industry.”
The AndCan Index was launched in June 2017. It builds from three years of comprehensive coverage of the U.S. cannabis market and assessments of demand by Anderson Economic Group; a rigorous methodology that has been presented in technical papers at two conferences of professional economists; and more than two decades of business consulting experience worldwide. Comments from other economists from these conferences, as well as additional research by Anderson Economic Group consultants, have been incorporated into the AndCan Index.
Rising cloud: February marked the fourth consecutive month of growth in U.S. demand for cannabis products
How the AndCan Index is constructed
The AndCan Index originates from tens of thousands of data points, including recreational and medical sales in states where cannabis products sales are legal (where available for Alaska, California, Colorado, Oregon, Nevada, and Washington). In addition, it includes calculations for the latent (unobserved) demand in emerging markets across the remainder of the 50 states.
Adjustments are made based on the concentration of cannabis in products that are sold both medically and recreationally—a highly-potent marijuana cigarette is indicative of greater demand for cannabis than a low-potency, cannabis-oil-infused beverage, for instance—as well as the market-share of these products, and pricing differences from state-to-state.
In those states where legal sales are not available, we estimated latent demand from survey data on marijuana usage, alcoholic beverage consumption and spending, and demographic data. Estimates are made for each state based on that state’s unique data.
Monthly data on actual purchases in states where the products are legal are the primary drivers of month-to-month variation in the AndCan Index. As states change their laws, AndCan captures the transition from latent demand to observed demand without the distortion that would be caused by incorrectly assuming that all taxable sales in newly-legalized states represent growth in consumer demand.
Historical data dates back to the start of 2015. All values are indexed to the period of the November 2016 U.S. general election. The index structure means that any value greater than 100 indicates that the market demand has increased since the baseline period of November 2016.
The same market expertise is used in the publication The Market for Legal Cannabis Products in the 50 United States—AEG’s 265 page, state-by-state analysis, now in its second edition (with detailed, forward-looking market assessments compiled in November 2016). This publication is the leading source on the economics of the cannabis industry. It covers actual and potential market size, indicative business value, tax revenue, alcohol beverage cannibalization, legal status, and political momentum.
The report is available for purchase at www.andersoneconomicgroup.com/CannabisReport.aspx
About Anderson Economic Group
Since its founding in 1996, Anderson Economic Group has become one of the nation’s premier boutique consulting firms, specializing in business valuation, expert testimony, and public policy. AEG has assisted governments, universities, large corporations, and businesses across the U.S. and abroad. All of the firm’s work is based on its core values of Professionalism, Integrity, and Expertise.
AEG is headquartered in East Lansing, Michigan, and has offices in Chicago, New York City, and Istanbul.
AEG—East Lansing, Michigan