May 2020 legal U.S. cannabis product demand increased more than four percentage points
- Monthly demand for legal cannabis products in the U.S. increased by 4.2% in May.
- At 18%, year-over-year demand growth remains very strong.
- After rebounding from a slight soft spot in April, the growth trend surged in May.
FOR IMMEDIATE RELEASE
EAST LANSING, MI—August 5, 2020—According to Anderson Economic Group’s monthly AndCan®Index, demand for legal cannabis products in the United States surged 4% in May 2020 after rebounding in April. AEG’s experts produce this monthly measurement by closely following 50 state trends for both the recreational and medicinal marijuana markets. Monthly calculations are based on benchmarks developed when AEG first began assessing the market in 2015.
Anderson Economic Group’s lead analyst for this market, Kenan Cosguner, cautions that the pace of the spike in cannabis demand seen in April and May is unlikely to persist at in the long-term. “Certain factors related to the COVID-19 outbreak, such as stimulus payments and restaurant and bar closures, have clearly increased demand,” said Cosguner, adding that “These factors are not permanent.” To clarify, Cosguner explains that “unless federal relief programs are extended, we should expect to see growth rates slow.”
Among the states benefiting from this short-term spike in cannabis demand is Colorado, where estimated recreational demand exceeded $150 million in May, our highest estimate on record for this state.
AEG’s expert consultants, including AndCan®Index lead Kenan Cosguner, are available for comment and further analysis by contacting AEG at 517.333.6984.
Cannabis in the News
- House Approves Legislation Allowing CBD Use By Military
Despite hemp’s legalization in the 2018 Farm Bill, Department of Defense policy prohibits members of the military from using CBD and other hemp products due to the challenge of distinguishing CBD use from cannabis use in drug test results. The US House of Representatives recently approved an amendment to the National Defense Authorization Act that would reverse this policy.
- Arlington Heights overturns ban on recreational marijuana sales
Arlington Heights, IL (pop. 75,000) reversed its ban on recreational marijuana sales as marijuana tax revenues become more appealing amidst COVID-19-related revenue shortfalls.
- Lawsuit seeks to keep recreational marijuana off AZ ballot
Though enough signatures have been gathered to include a recreational marijuana referendum on the November ballot, a lawsuit has been filed to prevent that from happening. The former state congressman filing suit claims that the description of the initiative, used to collect signatures, does not contain enough detail and misled voters as a result. Proponents of the initiative “call the lawsuit ‘ludicrous’” and say that the description “was never meant to be a point-by-point analysis of everything in the initiative.”
About the AndCan Index
Launched in June 2017, the AndCan®Index reflects observed demand from U.S. states that have legalized cannabis, and estimates latent demand in states where data on observed demand are unavailable. The National Association of Business Economists has recognized the superior quality of this work by honoring Patrick L. Anderson with a “Best Contributed Paper” award for the manuscript “Blue Smoke and Seers: Measuring Latent Demand for Cannabis Products in a Partially Criminalized Market.” This paper, now available online in the journal Business Economics, documents the methodology and challenges faced in development of the AndCan®Index.
The AndCan®Index builds upon:
- Over three years of comprehensive coverage of the U.S. legal cannabis market and assessments of demand by Anderson Economic Group;
- A rigorous methodology that has been presented in award-winning technical papers and at two professional economics conferences; and
- More than two decades of business consulting experience worldwide.
Comments from other professional economists have been incorporated into the AndCan®Index, as has additional research by Anderson Economic Group consultants.
In March 2019, Anderson Economic Group released the 2019 benchmarked AndCan®Index, which included a number of methodological and data improvements. They added data for a number of states that were not included in the original index, and updated the AndCan® methodology to take advantage of new data.
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 the core values of professionalism, integrity, and expertise.
AEG has offices in East Lansing, Michigan and Chicago, Illinois.
CONTACT: Lisa Wootton Booth
AEG—East Lansing, Michigan
LWBooth (at) AndersonEconomicGroup.com
Members of the media are invited to request early (24 hr) access to these monthly releases by contacting lwbooth (at) andersoneconomicgroup.com. Requests will be evaluated on a case-by-case basis.