Is the once Illegal Cannabis Business now becoming a Global Money Bag?

Cannabis was once fought against by most of the big law enforcement authorities in the United States and front line of this all was the DEA who extensively challenged the Cartels in Mexico and Columbia cutting across most parts of South America in the 80s, 90s running through to today’s world.The major cartel bosses had built fortunes into billions through their drug business which was flourishing a lot in the US and other parts of the world with cocaine and cannabis as their major production. Even the Mexican bosses had acres of land of Marijuana production which was flourishing on a major level in the 80s and all forms of this was illegal until now everything is taking a different turn into a legalization.

When really did it seem so ideal and perfect to legalize cannabis? Even after the fight over the years? Well, it’s become legal and several major corporations have gone into his legal productions. For 2020 only, legal cannabis grossed 17.5 Billion Dollars sales in the United States alone according to Forbes and if this isn’t mind blowing I wonder what is?

 

Now this is a break down of the sales flow across the United States in 2020 and beyond doubt if this much can be made what is stopping the illegal drugs cartel from venturing into legal production of Cannabis and further expand its network and capabilities to a wider market knowing fully well that with more influx of products there will be a market rise and insane demands.

According to a report by Forbes we drew out a few pointers as regards the state of Cannabis Business in the United States today,
1
Legal sales across the U.S.—14 states allow adult use, 36 allow for medical sales—hit a record of $17.5 billion, a 46% increase from 2019, according to a new report. Most of the sales growth came from adult-use markets, especially mature markets like Colorado, which grew sales by 26% to reach $2.2 billion, and Oregon, which saw sales hit $1.1 billion, a 29% increase over 2019, according to the report published by BDSA, a cannabis sales data platform.

 

2

“We expected more potential impact from an economic downturn, but the industry has proven to be resilient,” says Kelly Nielsen, who runs BDSA’s insights and analytics department. “It’s potentially recession-proof.”

Nielsen says three things contributed to the industry’s growth last year: the Covid-19 pandemic (many states deemed dispensaries “essential businesses” during lockdown); more customers entered mature markets like California, Colorado and Oregon; and states like Illinois and Arizona have created new adult-use markets.

 

3

Another factor driving the industry’s growth is a simple one: More people are consuming more cannabis than before. About 30% of consumers surveyed by BDSA said they shop for cannabis products more often, while 25% of consumers say their cannabis usage has increased since before the pandemic.

Across all U.S. adult-use markets, the number of people who consumed cannabis at the end of 2020 was greater than six months prior. Of people living in states that have legalized recreational sales, 43% use cannabis, up from 38%. In Colorado, where market penetration is greatest in the country, 48% of Coloradans imbibe.

“Close to 50% market penetration is really compelling, as alcohol penetration is around 60%,” says Nielsen.

 

4

Another aspect that buoyed his business is the enforcement of cannabis regulations, a sign that the market is maturing. The company’s shop in San Ysidro, which sits just north of the border with Mexico, was surrounded by dozens of illegal dispensaries until last year, when the city of San Diego shut them down. All that foot traffic made its way to legal stores like Urbn Leaf.

“Our shop on the border is now our busiest shop,” says Bubeck. “Two years ago, it was our slowest.”

Cannabis delivery companies also made a killing last year as they were perfectly positioned to capitalize on the pandemic. The number of Americans using cannabis delivery increased 25%, BDSA found.

 

5

The bulk of the cannabis industry is still in the black market. Illicit cannabis sales are estimated to be more than $100 billion each year. The legal industry is catching up, albeit slowly. By 2026, BDSA predicts the legal U.S. cannabis market will reach $41 billion in annual sales, roughly the size of the craft beer industry.

Even though his company generated more business than ever before, Bubeck doesn’t want to relive 2020.

The hardest part of navigating the pandemic as a business owner was managing the staff and the logistical problems posed by Covid-19, he says. If one person in the company’s supply chain tested positive, anyone who was within 6 feet of them for more than 15 minutes had to quarantine. Bubeck says if a department wasn’t strict with social-distancing protocols, an entire group of employees would be gone for ten days.

“I’d have to argue, despite this being our best year in terms of sales, that it hasn’t been a win for everyone,” says Bubeck.

With pointers from above we can see that at the moment 17% of the above 100 billion dollars sales of black market sales across the globe is what the legal industry is making and an anticipation of a greater growth in five years. With the cartels still running the show and making a huge chunk of money the cannabis business alone is still a money making machine but interestingly with its legalization for Adult use in 14 states in The US and in 36 states for medical use what’s the guarantee it wouldn’t shoot up higher if the whole country approves its legal use for adults when at the moment the current band width is grossing in 17 billion dollars plus in a year?

The business is still growing and sooner than expected would probably expand into one of the world’s most priced commodity if more legalization is granted and approved across the globe.

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