Technavio takes a look at 23 vendors that are expected to help the American cannabis market reach a value of more than 16 billion by 2019.

The cannabis market in the United States is already a multi-billion-dollar industry and is primed for massive growth through 2019. Valued at slightly less than $3 billion in 2014, the cannabis market in the US is expected to reach nearly $17 billion by 2019, growing at a remarkable CAGR (compound annual growth rate) of over 41%.

Source: Technavio

This growth is attributed majorly to the rapid adoption of cannabis by individual consumers for medical and recreational purposes. Four states have legalized the sale of cannabis for recreational purposes; this has turned out to be a boon for the industry, as it has a significant impact on the revenue of the vendors.

Cannabis is currently only legalized for recreational use in four states, including Alaska, Colorado, Oregon and Washington but 2017 could see multiple states being added to this list. States such as Massachusetts, Ohio, Missouri, Nevada and California have ballot initiatives for 2016 which could lead to legalization in 2017.

California represents the largest opportunity for the market and could drastically change the national landscape in terms of prohibition. California on its own represents one of the world’s largest economies and is already home to one of the most stout medical marijuana markets in the world. If California was to legalize cannabis for recreational use, their market share would surge and become more dominant than it already is. In 2014, California was responsible for more than 50% of the revenue from legalized cannabis sales in the US.

Cannabis legalized for medical use

The use of cannabis is also rapidly increasing for medical purposes, as cannabis helps in treating or providing relief to patients. The medical use of cannabis is expected to witness a CAGR of 39.9% during the period 2014–2019.

As of April 25, 2015, 25 states and Washington D.C. had legalized the use of cannabis for medical purposes, with pending legalization in a further seven states. Currently, the use of cannabis is restricted to these states, as production and use is illegal in the remaining states in the country.

The cannabis market in the US is expected to witness significant growth during the forecast period owing to the legalization of the cannabis market in other states. Currently, medical cannabis contributes more than 85% of the total market revenue; however, this share is expected to decline to 80.2% by 2019, mainly due to the increase in the use of cannabis for recreational purposes.