OAKLAND, Calif. , Aug. 15, 2019 /CNW/ -- After a rocky transition to regulated adult-use sales in 2018, California's legal cannabis market is currently on track to grow 23% in 2019 to $3.1 billion . Consumer spending is forecast to reach $7.2 billion in 2024, a 19% compound annual growth rate (CAGR) over the next five years, according to California: Lessons From the World's Largest Cannabis Market, a new report from Arcview Market Research and BDS Analytics.
California became the first state to have legal spending on cannabis fall year-over-year when switching from medical-only access to an adult-use regulatory regime – from $3 billion in 2017 to $2.5 billion in 2018. States making the move before – including Colorado , Washington and Oregon – have typically seen consumer spending double over 12 months. But in California , local bans on commercial cannabis activity caused the number of retailers to shrink sharply during the launch of the state's adult-use program in January 2018 . Stringent testing regulations that took effect in July 2018 prompted many suppliers to fold as product shortages cut consumer spending dramatically.
" California companies that survived the dual 'extinction events' of 2018 have emerged stronger and well-positioned to grow their market share going forward," said Troy Dayton , CEO of the Arcview Group. "More than that, they are battle hardened, and kicked off a merger and acquisition flurry in the first half of 2019 that will allow them to leverage their positions in California to compete across the country."
"Despite the burdens imposed on the legal market by regulators, with a $2.7 billion gross domestic product, California has the world's largest legal cannabis market and will continue to until federal legalization makes it merely a part of the larger U.S. market," said Tom Adams , Managing Director and Principal Analyst for BDS Analytics' Industry Intelligence group and Editor-in-Chief for Arcview Market Research. "At that point, California will assume its usual place in the world economy as a major exporter of agricultural commodities and their derivative products, a technology mecca, and consumer product trendsetter."
Other key trends analyzed in California : Lessons from the World's Largest Cannabis Market include:
- California Governor Jerry Brown forecasted that legal cannabis would bring the state $643 million from cannabis taxes in 2018. Actual cannabis-related tax revenue fell short of projections, totaling just over $345 million , with $182 million coming from cannabis-specific excise taxes and $36 million from cultivation taxes.
- Given the tax and regulatory load being carried by the legal market, California's illicit market is predicted to make up 53% of all sales in 2024; compared with the majority of other states with more supportive regulatory regimes whose illicit markets are expected to shrink to 30% or less of total sales in that time frame.
- BDS Analytics' Consumer Insights research found that the average consumer in California is 44-years-old. Also, younger generations consume at higher rates, with 39% of Gen Z and millennials and 41% of Gen X reporting consumption in the past six months, compared to just 20% of Baby Boomers and older generations.
- California currently has a relatively low number of retailers for its population, with only one licensed retailer for every 35,147 adults over the age of 21. Contrastingly, Oregon has one dispensary for every 5,567 adults over 21, while Colorado––the first state to launch an adult-use market––has 4,240 adults age 21 and over for each retailer.
The 61-page report is available for $297 , or as part of the annual Cannabis Intelligence Briefing Series subscription service from Arcview Market Research and BDS Analytics, priced at $1,975 .
About Arcview Market Research:
Since 2011, Arcview Market Research has published over 20 reports analyzing and forecasting the rapidly evolving cannabis space. Arcview's flagship annual report, The State of Legal Cannabis Markets has become the industry standard for market analysis and data in the sector. In 2017, Arcview Market Research partnered with BDS Analytics to add more robust point-of-sale data and consumer insights to its offerings. Arcview Market Research is a project of The Arcview Group. Founded in 2010, Arcview is responsible for a number of groundbreaking ventures in the cannabis industry. The Arcview Investor Network includes more than 600 accredited investors who have put more than $260 million behind 200+ companies. In 2015 Arcview became a partner in CanopyBoulder, the first seed-stage mentor-driven business accelerator. Arcview is also co-founder of Cannasure Insurance Services, the leading provider of business insurance to the cannabis industry. Forbes Magazine recently named Arcview among the top 5 financial firms in the cannabis sector. Arcview's next invitation-only investor forum will take place in New York City October 2-4 .
About BDS Analytics:
Headquartered in Boulder, Colo., BDS Analytics provides businesses with comprehensive, actionable, and accurate cannabinoid market intelligence and consumer research. The company provides a holistic understanding of the cannabinoid market by producing insights from tracking and categorizing millions of individual consumer transactions, extensive and detailed consumer research and generating market-wide cannabinoid industry financial projections, all delivered through its market-leading GreenEdgeTM platform. To learn more about how you can utilize BDS Analytics' industry-leading market research, please visit www.bdsanalytics.com.
View original content to download multimedia:http://www.prnewswire.com/news-releases/new-report-californias-legal-cannabis-market-on-track-to-reach-3-1-billion-in-2019-sales-7-2-billion-in-2024--300901475.html
SOURCE The Arcview Group
View original content to download multimedia: http://www.newswire.ca/en/releases/archive/August2019/15/c8270.html