Legalization of Marijuana Boosts Investment in Recreational Cannabis Market

Remember the dot-com mania and the financial boom which followed soon after? Our industry experts predict a situation of the same scale with the legalization of recreational cannabis, and CBD oil.

As it is, the medical marijuana market is flourishing and all set to record a CAGR of a whooping 21% by 2022. Legalization of marijuana is expected to have a similar effect on the recreational cannabis market as well.

Economy going “high” as cannabis gets the legal stamp

States like Washington and Colorado have already witnessed economic growth after the legalization of marijuana. Not only has legalization curbed the black market for weed but it has positively contributed to the creation of job opportunities as well. The tourism industry in these states has also grown substantially with the easy availability of legal marijuana.

While the Cannabis Act passed by the Senate of Canada aims at curbing underage use of the drug and related crimes, the economic implications of this move are hard to miss. According to our market research report, the Canadian marijuana market is worth more than $4 billion. Bill C-45 is sure to boost the growth of this industry, especially with users willing to pay a premium for legal access.

Read: How Legalization of Marijuana Benefits the Global Economy

What legalization of marijuana means for stakeholders and investors

Big names in the legal marijuana market like Canopy Growth Corp and Aurora Cannabis Inc. are witnessing an investment frenzy with the legalization of weed. Last year, cannabis cultivation and retail investments were valued at $700 million. With a continuous flow of investments and improved cannabis agricultural technology, the industry is expected to reach a value of $50 billion by 2022.

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From the point of view of investment strategies, the market for recreational marijuana is expected to be more volatile than the medical marijuana market. In the US alone, the rules for cannabis vary from state to state. Similarly, several public and private entities have already invested heavily in this industry. For instance, new exchange-traded funds have gone online and made huge investments in the legal marijuana industry. Stakeholders in the industry expect Bill C-45 to be a major catalyst in the global cannabis industry – boosting demand and creating investment opportunities.

Final takeaway

Legalization of marijuana is expected to bring down the sales of spirits, beer, wine, and related products. Though it is too early to predict the impact of this development on “sin-tax” revenue, the move has surely raised market expectations and is expected to have a positive influence on the global marijuana market.

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