Report: Medical marijuana sales to reach $1.7B this year
If there was any doubt that medical marijuana has become a thriving industry, the numbers tell the story.
Medical marijuana sales in the U.S. will reach $1.7 billion this year, with nearly $250 million coming from Colorado, according to a report released Thursday.
The report, billed as the first “investor-grade analysis” of the medical marijuana industry, is by See Change Strategy, an independent financial analysis firm that specializes in new and unique markets.
Medical marijuana markets exist in Colorado and six other states (California, Michigan, Montana, Oregon, Washington and New Mexico) and will open this year in five more areas (Arizona, Maine, New Jersey, Rhode Island and the District of Columbia). The report, which drew on more than 300 survey responses and dozens of interviews with market participants, found that 24.8 million people are eligible to receive a recommendation and purchase marijuana legally under state laws, and about 730,000 people actually do.
To put sales numbers in perspective, the report said, they already equal last year’s annual sales of Cialis and will soon rival the annual sales of Viagra, which totaled $1.93 billion last year. Sales of the anti-arthritis drug Celebrex totaled $2.37 billion in 2010. But, unlike medical marijuana, those drugs aren’t limited to select states.
Current marijuana markets will double in the next five years, the report concluded. The two major drivers of growth will be patient access as the number of legal patients rises and “regulatory clarity,” as states adopt regulation and license processes that facilitate the sale of medical marijuana. Colorado regulators are in process of adopting rules for the industry.
The report predicts that medical marijuana sales will reach $8.9 billion, or nearly half the current size of the illegal market for marijuana, if 20 more states allow its sale for medical use.
“While there is wide adoption already for medical marijuana, there also is significant potential for growth,” said Ted Rose of Boulder, editor of the study.
In Colorado Springs, based on sales tax collections on medical marijuana businesses, sales totaled nearly $22 million in 2010. Statewide sales, also based on sales tax collection data, totaled about $77 million for the fiscal year ended June 30.
As of last June, the Colorado Department of Public Health and Environment had granted 95,477 identification cards for its Medical Marijuana Registration program, including 9,000 in El Paso County and 771 in Teller County. Those numbers have since grown to about 120,000 statewide; no current estimates are available by county.
That means that the average registry ID cardholder bought about $800 of marijuana products from medical marijuana dispensaries. That would be enough to buy about 4 ounces of medical marijuana, based on a price of $200 an ounce advertised by several local dispensaries in recent weeks. Using that price, local dispensaries sold about 3½ tons of medical marijuana last year, and dispensaries across the state will sell nearly 40 tons this year.
