The cannabis industry is on a roll, according to the latest survey from brokerage firm Convergex.
Marijuana for both medical and recreational purposes is seeing "vibrant" growth as more U.S. states have opened legal markets, Convergex wrote. The team, led by analyst Jessica Rabe, says, "Our Colorado contacts reported steady pricing and customer traffic compared to three months ago, and brought in $576 million in retail marijuana sales last year – 84 percent more than in 2014."
According to an earlier report from Bloomberg, some experts believe this will be a $20 billion industry by 2020 as more states legalize pot.
In fact, Washington and Oregon, which started selling retail cannabis in July 2014 and October 2015, respectively, have seen even quicker adoption than in Colorado.
Convergex found that Oregon brought in $3.5 million in tax revenue during the first month that cannabis sales were taxed, which tops what Colorado or Washington saw in their first months of operation. "[This] exceeded the $2.9 million in taxes collected for both medical and retail marijuana sales in Colorado when stores were first able to sell the drug recreationally in January 2014. Washington also received less, only $1 million in August 2014." Washington also collected $486 million in total sales last year, nearly as much as Colorado despite having less time to mature as a market.
There are still a fair share of hurdles for the industry, however, although progress continues. There is now at least one startup helping these businesses open bank accounts, which can be difficult to do since marijuana is still illegal at the federal level. The issue of legalization is also expected to take more of a backseat in the 2016 presidential race, especially with the two most outspoken opponents of the industry, Marco Rubio and Ben Carson, no longer in the running.
"Investing in current marijuana markets remains risky, but states where cannabis is legal continue to push for changes that are friendlier to outside investment," Rabe concludes. "Colorado, Washington, and Oregon serve as informative experiments, with Alaska joining the mix once stores open later this year."