In 2023, the cannabis industry reaped the green as more states legalized marijuana. As legalization continues to gain momentum in the US, the cannabis market is experiencing evolution that reflects changing consumer preferences and regulatory developments. The industry’s budding fortune has resulted in an impressive forecasted total revenue of $33.6 billion by the end of 2023 in the US alone.
While sales are still expected to continue increasing at a rate of 14.95% annually between 2023 and 2028, the pace of growth has slowed down compared to previous years. The cannabis industry is beginning to enter a stable, more predictable period after experiencing an initial boom that previously resulted in an average annual growth rate of 30.5% between 2018 and 2023.
In this article, we’ll be covering North America’s cannabis sales trends for 2023, as well as taking a peek into what’s to come for this upcoming year in 2024. Continue reading to discover data-driven insights about the cannabis industry.
2023 Wrapped: Cannabis Sales in Full Bloom
Despite sales starting to level off, sales data from 2023 indicates that the cannabis industry is still on the rise. We’ve crunched the numbers, so let’s dig into them!
Overall Sales Snapshot
Zooming out to take a look at the cannabis industry as a whole, it was projected that the industry would hit an all-time high by the end of 2023 with $33.6 billion in total US sales. Comparing this figure to the previous year of $30 billion, this results in a 12% increase.
Diving a little bit deeper into individual dispensary revenue, data from KayaPush’s dispensary clients show that 73% of dispensary locations generate $50,001 to $250,000 per month, compared to only 39% of dispensaries from a public survey. Additionally, when we look at weekly revenue trends, Fridays generate 55% more revenue than Sundays on average. Following Fridays in the top spot, Saturdays and Thursdays typically generate the second and third highest revenue, while Sundays generate the least.
Although the cannabis industry is phasing out of its initial boom, it’s evident that it’s developing at a steady pace and there’s still plenty of room for further sales growth.
Cannabis Sales Impact on the US Economy
Oftentimes, when the growth of the cannabis industry is discussed, the additional economic impact isn’t considered. In reality, an estimated $100.8 billion was added to the US economy as a result of the cannabis industry. This translates to an additional $18-$10 added to the economy for every $10 spent on cannabis. The factors that contribute to this extra economic impact include:
- The necessities that cannabis workers need
- Taxes collected from cannabis businesses
- Cannabis property sales
- New businesses opening near cannabis dispensaries in previously declining areas
As the cannabis industry continues to expand, the US economy will also experience a positive economic impact in tandem with cannabis sales growth.
2023 420 Sales Data
If there’s one thing the cannabis community is good at, it’s coming together on 420 to celebrate their shared love of the plant. On April 20, 2023, cannabis enthusiasts from coast to coast made this day the largest cannabis sales day in legal history. Across the entire industry, we saw a remarkable $178.2 million in total sales, which is a 14.3% increase from $154.4 million on April 20, 2022.
Driving Forces: Rolling Momentum
The cannabis industry is riding the wave of momentum as sales continue to increase at a steady pace. Here are some of the driving forces that we’ve seen in 2023 that contributed to the industry’s growth.
4 States Legalized Marijuana in 2023
This past year, the US cannabis industry has seen big moves regarding legalization. A total of four states passed laws to legalize marijuana and an additional two states started adult use cannabis sales in 2023:
- Delaware: Legalized recreational cannabis on April 23, 2023. 30 approved dispensaries will be opening by September 1, 2024.
- Minnesota: Legalized recreational cannabis on May 30, 2023. Cannabis sales began on August 1, 2023.
- Ohio: Ohio voters approved Issue 2 to legalize recreational cannabis on November 7, 2023. The law went into effect on December 7, 2023 with legal cannabis sales expected to start in late 2024.
- Kentucky: Legalized medical marijuana on March 31, 2023. However, the law will not be going into effect until January 1, 2025.
- Maryland: Maryland voters approved a referendum to legalize recreational cannabis in November 2022. The law took effect on May 3, 2023 with cannabis sales beginning on July 1, 2023.
- Missouri: Legalized recreational cannabis on November 8, 2022 with the first licensed sales starting February 3, 2023.
As more states legalize cannabis, it creates a ripple effect, which expands the consumer base, attracts investment, and fuels the overall growth of the industry.
Acceptance of Legal Cannabis Use
As cannabis use becomes more prevalent, so is widespread acceptance of legal use. According to a recent study, only 10% of US adults believe that marijuana shouldn’t be legal at all. The remainder of the population is divided between 59% believing it should be legalized for both recreational and medicinal use and 30% believing it should be legalized for medicinal use only. With most of the population being open to accepting marijuana use, we can expect more states to legalize in 2024, opening up the market for further growth.
Changes in Consumer Behavior
The changes in consumer preferences and behavior reflect the evolving industry. As the legal use of cannabis becomes more mainstream, the preferred products and customer demographics change in tandem.
Taking a closer look at product trends, there was an overall decline in certain types of cannabis products, such as tinctures, topicals, capsules, and flower, in 2023. Despite this decline, it seems as though cannabis beverages, edibles, vapes, and pre-rolls gained popularity instead. Another pattern that we’ve seen is the difference in users’ preferred method of consumption.
Novice users tend to like vaporizing the most, whereas smoking is most popular amongst experienced users.
Along with product trends, there were also some notable demographic trends from 2023. The vast majority of total cannabis sales were made by millennials with a market share of 46.2% in the US and 50.3% in Canada. Coming in second, Gen X accounted for 23.9% in the US and 20.6% in Canada. Analyzing these numbers further, approximately 70% of all cannabis users in the US and Canada are currently between the ages of 27 and 59.
What’s Next For The Cannabis Industry in 2024?
More high times are predicted for the cannabis industry in 2024. With 11 states currently on the Cannabis Business Times’ watchlist for potential legalization in 2024, we can expect the cannabis craze to enter more untapped markets this year. Looking toward the future, 2024 cannabis sales are forecasted to hit $38.4 billion, which is a 14.3% increase from 2023.
On the business side, the cannabis industry can expect more capital investments to support its growth, as well as an increase in mergers and acquisitions (M&As) as businesses form partnerships to ensure scalability. Additionally, you can expect to see more research and development (R&D) taking place due to the need for dependable research now that legalization is becoming more widespread.
Taking a look at the consumer side of things, with the social acceptance of marijuana becoming increasingly universal, we can anticipate increased mainstream usage along with a more diverse customer base from all walks of life. As the generalized use of cannabis continues to grow, consumers will seek knowledge about cannabis products, which will contribute to an increase in widespread consumer knowledge.
All in all, the cannabis industry is still on the rise with legalization efforts presenting additional growth for the industry. Undoubtedly, there’s still plenty of room to grow for this budding industry in 2024!
Learn more about what’s to come this year by downloading our 2024 State of the Industry Report, which was the main data source used in this article.
