Cannabis has been splashed across headlines and highlighted in social media for two main reasons: First, it has become a subject of intense legal debate, with proponents all over the country vying for its legalization; and second, because it has become the target of intense economic scrutiny. In other words, it’s big business.
Big business often translates not just to dollars and cents for Americans, but jobs, opportunities and furthermore, an expanding market which includes innovative products. Cannabis has been cited as having a beneficial effect on health, with users stating that it can alleviate a number of physical symptoms, from headaches to appetite loss and even depression. Emerging studies have focused on its potential and people are scrambling to corner the market on this once banned substance.
But just how much money do Americans spend on weed? The answer isn’t exactly cut and dried, and much of the speculation is laced with assumptions and overblown data. However, some recent estimates state that Americans spend just as much on weed as they do on Taco Bell.
This translates to roughly $10 billion dollars per year. In fact, this tops spending on a number of items in the United States, including e-cigarettes, goldfish crackers, and even the explosively popular game Fortnite. Cannabis sales are on track to outpace the sale of some traditional items, such as cigarettes and beer.
Though cannabis has not eclipsed the market on these items yet, alcohol and tobacco companies are taking notice. Some brands are hoping to move into selling their own cannabis-based products, a move that may push cannabis even more into mainstream consciousness.
Economic experts predict that as legalization grows for medicinal cannabis, these figures will increase. With the passing of the 2018 Farm Bill by President Trump, which legalized hemp and hemp products including CBD, pundits are certain that there will be a potential demand of upwards of $50 billion or more, including black market shares.
Just recently, the government announced that it would be growing its own marijuana – up to two tons – in an effort to produce the largest and most definitive study to date on marijuana and its effects. By closely examining CBD and THC, the government is hoping to align its take on weed with many other states. It is working alongside the University of Mississippi to grow the largest crop of marijuana that has been seen in over five years.
With this program in the works, it is quite possible that the price of marijuana will surge, especially as some individual growers have been denied the leave to grow their own. Seeing what effect this will have on consumer behavior won’t be as crystal clear.
Who is Buying Weed?
The average generally ranges in age, class, race, and culture. They are united by not just the fun aspect of getting high and feeling relaxed by toking up, but they are also united by a need to mitigate pain and other physical symptoms. It’s estimated that they currently spend up to $645 a year or more on cannabis. However, there is a growing segment that spends up to $1000 or more, and a smaller group that spends even more – up to $5000 a year.
In fact, a report states that even in a single buying session, most people may spend between “$25 and $50 per trip to a marijuana store, with a $33 median spend per trip. 34.7% of customers spend less than $10 on average, usually picking up a single item like a half gram pre-roll or a carbonated beverage. Only 8.2% spend more than $100/trip.”
Although the report states that the majority of users are male, women are a growing demographic, with women accounting for nearly 31.1% of sales and men at 68.9%. With this in mind, it’s quite possible that legalization will prompt an entirely different wave of consumers. The consumer base will most likely diversify even more, and pending federal approval, age groups may also run the gamut. This is especially true in light of FDA approval of drugs such as Epidiolex, a cannabidiol epilepsy drug used to treat children.
There is evidence that people of many different ages are already beginning to shrug off the vestiges of marijuana stigma and are embracing its potential benefits. Estimates from experts state that the fastest group of individuals looking to buy marijuana and CBD-based products include those aged 50 or older. This group grew by nearly 25 percent within the last year alone. Some sources report it’s this generation – the baby boomers – that are spending an average of $95.04 per trip at the local dispensary. This is especially true in states like California.
What are People Buying?
Although the image of the party-hardened stoner is quite prolific in pop culture, that’s not the entire picture. Cannabis can be used as a recreational substance but touts many potential medicinal benefits. These benefits can be seen in a variety of products, not just the traditional joint or bong. In fact, it is estimated that a large wave of consumers are buying hemp-derived and CBD-based products including oils, tinctures, creams, lotions, and edibles.
There is an entirely new world opening up, and products derived from hemp plants are beginning to be sold at mainstream venues, such as CVS, Walgreens, and even Kroger, with these retail giants projected to lead in retail CBD sales of up to $23 billion dollars in the next few years. Many of these outlets are stocking up on products such as CBD waters, lip balms, creams, and sprays. Those who frequent these stores are buying CBD for its potential impact on wellness. Many of these products are considered an alternative to traditional methods of treating a host of maladies, including pain, skin irritations, and sleep disorders.
Future Social Impacts
A study from the Drug Policy Alliance recently indicated that, as laws have changed and the sentiment towards marijuana has grown more permissive, there is a reduction in the number of arrests in connection with marijuana. This translates to big savings for states. Experts are citing the continued reduction in penal prosecution to be hundreds of millions of dollars across the country.
This will most likely lead to an increase in marijuana sales as consumers become less fearful of being stopped by police or arrested. In fact, legalization may loom as a boon to law enforcement as leading legal experts assert that data from the FBI shows that when legalization in a state goes up, the number of cases solved related to violent and property crime increases. Experts state that legalization basically gives police officers more time and investment to look into more serious crimes, a social investment that is sure to add up in dollars and cents down the line.
The legalization of cannabis has also been tied to the reduction of other health issues, including rates of opioid-related overdoses. As cannabis and cannabis-related products become more prevalent, experts are stating that it could help to stem the tide of addiction and spur recovery for addicts. Though there aren’t conclusive correlations, the Drug Policy Alliance has reported that, in states which have legalized medical marijuana, there is a 25% reduction in opioid-related incidents, including dependence and abuse.
States can then look to an increase in revenue as people turn not to opioids but to marijuana and CBD for any pain-related issues or depression. It’s a booming business that is sure to spell lots of money and spur local and state governments economically.
Final Thoughts: America’s Weed Boom
Though marijuana was oft-maligned in the past, it now stands as a booming business, creating a sector that has enhanced the economy with thousands of jobs (a 76% increase from previous years). According to BDS Analytics, it is estimated that nearly 100,000 individuals were employed in the cannabis industry a few years ago. This figure grew to 121,000 in 2017.
By 2021, this field could easily have 292,000 workers. Those working in the field tout high maneuverability and great pay. It has already proven to be quite lucrative, with individuals spending their cash on weed as much as they do at fast-food chains, cosmetic surgery, snacks such as Cheetos or Doritos, and chewing gum. These figures don’t include unlicensed sources.
Experts believe that as legalization on a federal level becomes more of a reality, consumers will continue to tap into this growing market. With the government tasking the University of Mississippi with conducting the largest study of cannabis ever implemented, perhaps complete legalization will soon become a reality.
With billions of dollars at stake, it’s no wonder that cash-strapped states may be rethinking their positions. After the passage of the Farm Bill and the legalization of hemp-derived CBD, things are looking up for marijuana acceptance.
There’s no sign that things are slowing down, and it’s quite possible that in coming years a dispensary will be open on nearly every corner, there will be CBD products on every supermarket shelf, and those who would like to grow and distribute hemp in many areas may be able to do so. States can look forward to millions of dollars in taxable revenue.