EAST LANSING, Mich. – The legal cannabis market in the U.S. showed steady growth throughout 2020 as more states legalized cannabis and products became more widely available, peaking in summer 2021, according to Anderson Economic Group’s AndCan®Index, part of its new cannabis dashboard released today.
Since its peak in July 2021, the market has been more volatile, decreasing one month and increasing the next, which may be tied to the pandemic and changes in consumer behavior, such as short-term demand spikes as consumers changed their spending patterns in response to surges in COVID-19 transmission.
Other key findings from this quarter’s cannabis dashboard:
- Most Americans now live in one of 36 states with legal medical cannabis.
- 33 of these states have functioning medical cannabis markets
- Three more states (Alabama, South Dakota and West Virginia) have legalized the product for medical use but have not yet begun legal sales.
- A smaller but still substantial number of Americans live in a state where recreational cannabis is legal.
- 12 states have functioning recreational cannabis markets, and six more have legalized cannabis for recreational use but have not yet begun legal sales.
- The amount of state tax revenue generated by cannabis sales overall also peaked in the third quarter of 2021, at $944 million total ($472 million in recreational excise tax, $446 million in general sales tax and $26 million in medical excise tax).
- A U.S. map highlights the varying amounts obtained by state in 2021, from $0 in states with no market to over $1 billion in California.
- Other top earning states in total state tax revenue generated by legal cannabis sales include Illinois ($524 million), Colorado ($381 million), Arizona ($219 million), Nevada ($208 million), Michigan ($194 million) and Massachusetts ($140 million).
“Looking forward into 2022, we will be watching closely to see if changing consumer behavior related to the COVID-19 pandemic continues to affect the market, or if demand begins to stabilize,” said Andrew Miller, Anderson Economic Group’s lead consultant on the legal cannabis market. “We’ll also be carefully monitoring the new legal markets that are poised to come online this year.”
Anderson Economic Group launched its AndCan®Index in 2017, which has measured consumer demand in all 50 states. Anderson Economic Group utilizes its proprietary legal sales and medical cannabis patient database assembled with data from dozens of state government agencies to determine market demand. The firm treats legal cannabis products as a consumer commodity, accounting for consumer tastes, product availability, and the existence of substitutes, among other factors.
Anderson Economic Group’s cannabis dashboard is updated quarterly and is available for free.