US cannabis market estimated at $80 billion by 2030

Stock analysts at Cowen, a multinational investment banking and financial services company, have estimated U.S. cannabis sales to $80 billion by 2030 (assuming cannabis has been legalized at the federal level by then). This represents a $5 billion increase over their previous estimate, and an annual growth rate of 4% for an industry that Viven Azer, Cowen's managing director and analyst, currently estimates sales at $50 billion.

An increase in the number of consumers

«Our increased confidence reflects a stronger-than-expected increase in cannabis use among adults,» explains Vivien Azer. The proportion of US consumers was modeled by Cowen at 21 % of 18-25 year-olds and 7.6 % of over-26s for the year 2017. However, this was slightly underestimated since, according to the National Survey on Drug Use and Health, the actual proportion of consumers is 22.1 % and 7.9 % for these same age groups.

Cowen's analysts also took into account an increase in the tendency to return to cannabis after quitting. According to their own survey, Cowen analysts found that 39% of users who reported using cannabis at least once in their lives also reported using in the previous month compared with 30 % in 2016. This trend is generally due to the greater availability of cannabis within the legal framework. The industry will also capture new consumers.

A market that needs to grow

Of the three cannabusinesses Cowen tracks on Wall Street (Tilray Inc. (TLRY) , Canopy Growth Corp. (CGC) and KushCo Holdings Inc. (KSHB)), the company expects them to achieve triple-digit growth. This is already the case for KushCo, an American company that produces packaging for the cannabis industry.

So far, Tilray and Canopy's sales growth is only in double digits. Canopy even recorded its first revenue decline between two quarters of 2018, but Cowen attributes this to development difficulties (shortages, no stores In Canada, the market is estimated at 2.3$ in 2019. In the United States, the federal market will also take time to establish itself. Analysts point out that the share prices of these companies will still be higher than market reality. In other words, speculation will continue to have the upper hand in the years to come.

The job market as an indicator of growth

Despite the still less-than-optimal performance of cannabis businesses, the swelling labor market in the sector indicates that the industry is booming. In 2017, between 90,000 and 110,000 people worked full-time in the US cannabis industry. In 2018, there were between 125,000 and 160,000 workers, according to charts from Cali Extractions. That means there are more workers in the U.S. legal cannabis industry than pilots or booksellers. At this rate, cannabis workers will soon overtake schoolteachers and bus drivers.