While it may have been a touchy topic in the past, current data makes it clear that large-scale cannabis farming in the U.S. is here to stay. As of 2022, it is now legal to grow cannabis (for either medical or recreational use) in nineteen states.
The expansion of the legal cannabis industry has already had a widespread impact on the economy, and isn’t expected to stop any time soon. As more and more growers get into the game, cannabis is proving itself to be a major cash crop. Here’s what the data has to say on legal cannabis:
- Legal cannabis sales in the U.S. are expected to hit $40 million by 2026
- The legal cannabis industry is forecasted to grow 11% between 2022 and 2030
- The legal cannabis industry currently supports almost 500,000 U.S. jobs (with numbers continuing to grow)
- Sates earned over $3.7 billion in tax revenue from legal cannabis sales last year.
That being said, the path forward for legal cannabis farming in the U.S. still has some roadblocks, and further progress is needed.
Read on for our expert breakdown of the current state of legal cannabis farming here in the U.S.
1. Licensing and Regulation
In every state where marijuana is legal, commercial farms must secure a license. This process often comes with hefty application fees.
Furthermore, states maintain control over the number of licenses they give out, so getting one is extremely competitive. That being said, if you manage to secure a license, your operation has a lot of potential. According to a 2022 report, cannabis is now the sixth most profitable cash crop in the United States, and demand continues to grow.
Another hurdle faced by commercial cannabis farms is access to assistance. Unlike most of the agricultural industry (including other cash crops like soy, wheat, and cotton), the cannabis industry does not yet qualify for federal assistance. This can take the form of loans, crop insurance, and grants, all of which benefit the traditional agriculture industry tremendously.
Commercial cannabis growers are also not currently eligible for small business loans. Various bills have been introduced with the aim of expanding access to assistance in the cannabis industry, but none have been passed yet. It seems that commercial cannabis operations still have some waiting to do before they can have access to banking and federal assistance.
2. Expanding Markets and Demand
As more states legalize the growing and sale of cannabis, new markets begin to open up. Both more mature cannabis markets (such as Colorado) and newer markets (including Arizona and Hawaii) have seen substantial growth since 2021. In fact, in its first ever weekend of recreational sales, New Mexico (a state with only 2 million residents) saw sales total 5.2 million dollars. Now that’s what we call a cash crop!
Demand for cannabis products is also continually on the rise among U.S. adults. While cannabis flower is still the most sold product, demand for concentrates and edibles is also increasing. Online ordering and delivery services are also a huge driver of cannabis sales.
3. Changing Attitudes
One of the most important factors in cannabis industry growth is that consumers’ attitudes are changing. In 2021, Pew Research Center found that 91% of U.S. adults are now in favor of legalizing cannabis.
As attitudes begin to shift, the cannabis industry gains new and more diverse customer bases. For example, women now make up 48% of all new cannabis customers.
Cannabis customers are also more informed than ever before, with more and more consumers doing research on different strains and THC dosage before purchasing.
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