Chronicling the Growth of the Cannabis Industry: Part 1
So much has changed for the once- clandestine pot industry. One by one, American states are loosening cannabis laws, raking in precious tax revenue, and navigating related impacts of the newly legalized drug such as increasing DUI rates. The world is a different place, and this isn’t your father’s pot.
It is remarkable to consider that while recreational cannabis was first legalized in Colorado and Washington in 2012, there are now several thousand licensed and legal dispensaries scattered across eleven states and the District of Columbia. With increasing access and decreasing criminalization come reduced stigma and increased usage. In the first quarter of 2020, Merrill Research conducted a research study among 401 adult recreational cannabis and/or alcohol consumers to understand perceptions and usage of these products.
We found overall sentiment regarding recreational cannabis to be quite strong, with one in three reporting being extremely positive and an additional one in four being somewhat positive (58% top 2 box positivity). These are consistent with a 2019 study by the Pew Research Center, in which 59% of U.S. adults said marijuana should be legal for medical and recreational use, as opposed to medical use only or no legalization at all.
Perhaps unsurprisingly, we observed an inverse relationship between age cohort and positivity, wherein the older respondents become, the less positive they are to recreational cannabis. Widespread acceptance among younger cohorts is not difficult to track when one considers sociological factors. Entering adulthood during an age of public discourse and legalization ballot measures can support a completely different perspective than for those from older generations.
Recreational cannabis usage appears to be on the rise, with more than four in ten users indicating they are consuming more now than they were a year ago. Even after factoring in the 7% who reported a decrease in consumption, we still see a net increase of 35% year over year.
The U.S. cannabis industry is widely accepted as a high-growth prospect, with analyst firms consistently forecasting a compound annual growth rate (CAGR) of 14% and higher through 2025. There is some speculation that the industry will nearly double in revenue, to $31.1B in 2024. While the legal cannabis industry’s roots are in medical applications, recreational use is expected to represent the lion’s share of growth going forward.
According to users in our study, recreational cannabis consumption is typically a solitary or small group affair. Most commonly, consumption is done alone/by oneself (72%), with a spouse or significant other (41%), or with 1 to 2 close friends (35%).
In general, recreational cannabis users report being discreet about their usage. While half report being as open about their cannabis consumption as they are about alcohol, 30% report being less open about their cannabis usage.
Stay tuned as we release more findings from this research study. Till then, contact us if you’d like to learn more.