Forecast: 69 Million Pot Users in U.S. By 2030
Welcome to Weed Nation. Marijuana is becoming as ubiquitous in the United States among average consumers as coffee, soda, or burgers. If you think you’ve missed out on the marijuana boom, think again. The room for growth in the cannabis sector remains enormous.
Marijuana has emerged as a consumer staple and as such, the industry is recession-resistant. In fact, global food and beverage conglomerates are buying up companies that make branded marijuana products, including everything from cannabis-infused beer to THC-laced gummy bears. This trend is set to accelerate in 2023.
According to a new report released March 1 by the research firm New Frontier Data, an estimated 54 million U.S. adults will consume cannabis in some form at least once in 2023 throughout both legal and unregulated markets. That level of consumer activity is expected to grow by about 4% annually over the next eight years, reaching an estimated 69 million U.S. consumers by 2030 (see the following chart).
For context, consider that the total population of the U.S. currently stands at about 332 million.
Three of the 10 states with the most marijuana consumers (Florida, Ohio, and Pennsylvania) are on track to legalize recreational (i.e., adult-use) markets over the next few years, while Texas and North Carolina could soon approve full medical programs.
A panel of Texas lawmakers heard testimony Tuesday on proposed legislation that would decriminalize marijuana possession.
The North Carolina Senate passed a bill to legalize medical marijuana on Wednesday, sending it to the House.
The legislation in North Carolina would allow patients with qualifying medical conditions such as cancer, epilepsy, post-traumatic stress disorder, and multiple sclerosis to possess and purchase marijuana from licensed dispensaries. The bill’s chances of eventual enactment are considered good.
Current curbs on cannabis in both Texas and North Carolina highlight the sheer size of market opportunity over the near term.
Aside from Washington D.C., which has legalized the possession and use of cannabis for adult-use, but not the sale or legal marketplace, all of the states with the highest density populations of cannabis consumers are currently operational adult-use markets.
It’s an investment truism: invest in products that people will always want, in good times or bad. And when it comes to providing a product that people crave the world over, marijuana passes the test.
During recessions, so-called sin stocks (alcohol, tobacco, etc.) tend to outperform. Add recreational cannabis to the list. Many consumers now ingest a THC-infused edible as casually as they consume a croissant and latte.
The new devil’s weed…
In fact, as they contend with shrinking markets, large-cap tobacco companies are buying promising marijuana companies, to diversify their product portfolios and move away from nicotine.
Tobacco companies realize that marijuana is competition, so they’re working hard to co-opt it. Opinion polls show that consumers increasingly have a more positive view of marijuana than they do of alcohol or tobacco. Nicotine is the new “devil’s weed.”
In an ironic twist, psychedelic drugs are currently being used to wean people away from harmful addictions to nicotine, alcohol, and opioids. “The War on Drugs” is over. Drugs won.
Another reason marijuana demand has resisted the economic slowdown is the combination of low unemployment, wage growth, and household savings. Those factors translate into more disposal income for consumers to spend on weed.
The marijuana industry had a rough year in 2022, largely due to headwinds caused by the economic slowdown and the broader bear market. But over the long haul, the purveyors of recreational and medicinal marijuana offer the potential for outsized investment gains.
It’s particularly impressive that culturally conservative “red states” are increasingly amenable to legalizing psychotropic substances that had been demonized as immoral for decades.
Even if the overall stock market and pot stocks fall further in coming weeks, you’d still be tapping into a “megatrend” at attractive price points that were previously unattainable. The key is buying quality stocks. That’s why I’ve launched a new trading service.
Called Marijuana Profit Alert, my publication is your guide to reaping profits from the investment bonanza in marijuana and psychedelic drugs. Click here to learn more.
John Persinos is the editorial director of Investing Daily.