The legal marijuana industry in the U.S. is forecast to soar to $50 billion over the next decade, according to analysts at Cowen & Company, a leading Wall Street investment bank.
Medical marijuana has already been legalized in 29 states, as well as Washington D.C. and the U.S. territories of Guam and Puerto Rico. As of today, there are now eight states, plus the District of Columbia, that have voted to allow recreational marijuana use, a trend that appears to be accelerating across the nation.
For state governments the money is good — very good.
Colorado generated nearly $200 million in tax revenue from marijuana in 2016, and is reported to have collected more than half a billion dollars in revenue since legalizing recreational cannabis sales in January 2014.
California, which generated $1.8 billion in medical marijuana sales in 2016, is forecast to see sales jump to more than $6 billion in 2020, when their new recreational marijuana laws take effect. The move to recreational is also expected to boost employment in the state, with as many as 100,000 new jobs created.
The overall economic impact of legalization in the U.S. is forecast to reach $70 billion annually by 2021, according to data from the 2017 edition of the Marijuana Business Factbook, a 241 percent increase over the five-year period.
To put that in perspective, for every dollar spent by marijuana patients and customers, $3 in additional economic benefit is realized, mostly at the local level. Stats such as this are driving the industry’s transformation from black-market business to a legitimate and major economic force. And this is also driving greater acceptance from legislators, who want to reap the benefits for their constituents.
“This is alcohol at the end of prohibition,” said Les Ball, CEO of Green Spirit Industries (OTC: GSRX). “I believe the future of cannabis is comparable to what happened in the spirits business.”
Despite the massive size of the market opportunity that lies ahead, the cannabis industry today is still comprised mostly of small “mom and pop” operations. Ball and his team at Green Spirit are seeking to change that paradigm.
Ball brings serious executive retail experience to the industry. His background includes serving as CEO and President of Corral West Ranchwear, where he grew the company to 140 retail stores nationally. Previously he spent 22 years at Macy’s Inc., where he was President of Macy’s East, President of Macy’s South, President of Macy’s Wholesale, and Chairman and CEO of Macy’s Midwest.
Under Ball’s leadership, and with the capital to execute, Green Spirit looks positioned to become an early leader in the industry.
In a recent interview with The RedChip Money Report, Ball outlines the company’s plans to build a vertically-integrated operation, spanning growing, manufacturing, and retailing.
Green Spirit has already secured four pre-approved licenses for medical marijuana dispensaries in Puerto Rico and is expected to secure a fifth license in the near future. The build-out of the company’s first three dispensaries, which are located in some of the hottest tourist destinations on the island, has already recommenced post-hurricane Maria, and the Company recently reaffirmed the locations should open for business before yearend.
As Puerto Rico works to rebuild from the devastating effects of hurricanes Irma and Maria, revenue from marijuana sales could provide a strong economic boost. Medical marijuana is projected to add $70 million in tax revenue for the island annually, and some believe officials may now expedite the transition to recreational sales to further speed up recovery efforts.
Based on results from Washington and Colorado, as well as projections for California’s transition to recreational, Puerto Rico could see marijuana sales skyrocket to $1 billion to $1.5 billion within a couple years.
As mentioned earlier, legalization produces an estimated $3 in additional economic benefit for every $1 spent by patients and customers. This could mean nearly $5 billion in additional economic benefit annually for Puerto Rico, money sorely needed as the territory moves ahead with its recovery.
Green Spirit also has its sights set on acquisitions in other key markets in the U.S.
More than 62 million Americans live in states where it’s now legal to buy, grow, and sell marijuana. As a well-funded company with a strong management team in place, Green Spirit is perfectly positioned to take advantage of this immense opportunity, which could lead to big rewards for the company’s early investors.