Ganjapreneurs Are Baking Billions: A Look into the $5.4 Billion Pot Business

In 2013, Colorado made pioneering strides by becoming the first state to legalize the recreational use of marijuana. Fast-forward to 2016, and marijuana can now be used in three more states recreationally and in a total of 23 states medically. In tandem with the exponential boom of marijuana legalization is the sharp growth of the legal marijuana market. The legal cannabis market achieved $4.6 billion in sales in 2014 and was met with even more success in 2015 when it pulled in an estimated $5.4 billion, according to ArcView Market Research, the leading provider of market data on the cannabis industry.  Not surprisingly, “edibles and other infused products” comprise at least half of legal marijuana sales in the United States. This number will likely continue to grow as more states legalize the recreational use of marijuana in coming years.

“Weed edibles” or “pot edibles” are quite possibly one of the “most exciting” aspects of the marijuana industry today, says founder and chairman of American Cannabis Partners, Christian Hageseth. Although more edible weed companies are popping up each year, such as Snoop Dogg’s Leafs brand and the Colorado-based company Incredibles, nobody knows yet who will become the “Apple computers or the McDonald’s hamburger or the Coca-Cola” of the edible weed world, Hageseth notes. All these brands bring edible weed to new heights, with weed-based soft drinks, candy, cookies, and even dog biscuits.

One ganjapreneur Peggy Noonan hopes to eventually go national with her product line. She is the founder and CEO of Cornucopia Health and Wellness, an edible weed company based out of Tucson, Arizona. Her company, which opened in April 2014, specializes in unique products such as Weedish Fish gummies, lozenges, Serenity Tincture, and extra-large brownies, blondies, and cookies—all infused with varying degrees of marijuana. Noonan’s company has benefitted from the edible market’s recent growth. In the past three months, sales have doubled, and Cornucopia’s XL-brownies can fetch as much as $12.50 per slice.

Arguably, there are downsides to the boom in marketable marijuana products. In 2014 alone, the American Association of Poison Control Centers fielded 456 incidents related to accidental ingestion and exposure to THC, the psychoactive chemical compound in marijuana. Studies reporting a positive correlation with the use of legal marijuana products and trips to the emergency room have started surfacing. To deter such incidents, states have taken proactive measures, such as requiring all marijuana products to be sold in child-resistant packaging or for packaging to be free of cartoons and other designs that typically appeal to children.

Still, despite these impediments, the marijuana market in the United States is predicted to grow unless pushback from the law intensifies. A case currently in progress, Nebraska and Oklahoma v. Colorado, could very well nip the legal marijuana market in the bud if the SCOTUS justices find that the retail marijuana market in Colorado has a significant and detrimental impact on its Nebraskan and Oklahoman neighbors. The case, which was originally filed in December 2014, will be heard by SCOTUS later this year.

Ganjapreneurs Are Baking Billions (PDF)