WASHINGTON -- The fast growing medical marijuana trade is on pace to eclipse the market for Viagra, the first sophisticated analysis of the industry found in a report out Wednesday. The study only focused on transactions, ignoring ancillary businesses that serve the industry, such as insurance companies, law firms, public affairs companies or hydroponic equipment makers.

Medical marijuana sales will total $1.7 billion in 2011, just $200 million less than sales for Viagra, Ted Rose, the study's author, said in a conference call with reporters. The industry has ballooned since the Obama administration declared that it would not raid pot shops as long as they were acting within state law.

The significance of the industry was demonstrated by the list of news outlets on the conference call, which included reporters from CNN Money, Dow Jones, The Associated Press, Fox News and Portfolio.

The report was produced by See Change Strategy and is targeted to medical marijuana businesses, which can purchase the full report for $1,150. An executive summary was made available at MedicalMarijuanaMarkets.com.

The report surveyed just seven states where medical marijuana is bought and sold in the open market: California, Colorado, Michigan, Montana, Washington, Oregon and New Mexico. Four other states -- Arizona, Rhode Island, New Jersey and Maine, plus the District of Columbia -- will see legally sanctioned pot shops open later this year. Medical weed is legal in Hawaii, Nevada, Alaska and Vermont, but those states don't yet have stores operating in the open. (Nevada does have a few pot shops in operation, but not enough to move it into the first category yet.)

Roughly three-quarters of the trade is done in California, the report found, with much of the rest done in Colorado, meaning there is tremendous room for growth in coming years. The market will reach $8.9 billion within five years, the report found, barring a policy reversal from the federal government.

Today, one in four Americans live in one of the states where pot is openly bought and sold. By consulting with epidemiologists, the study's authors concluded that 24.8 million people live with conditions that would make them eligible for legal medical marijuana -- a number that continues to grow and could have political significance come election time.

Ryan Grim is the author of This Is Your Country On Drugs: The Secret History of Getting High in America