Operators have benefited from increased acceptance of medical marijuana products
New york, NY (PRWEB) May 08, 2014
For decades, all marijuana transactions in the United States were conducted under implicit or explicit prohibition. States have increasingly moved to legalize nonprofit marijuana growing for medical purposes and implement regulations for organizations that produce and distribute cannabis. The growing acceptance of medical marijuana is providing operators and investors with unprecedented opportunities. Revenue growth did slow in 2011, though, due to aggressive prosecution of medical marijuana growers and dispensaries by the Drug Enforcement Administration. This sort of intervention has increased uncertainty for industry operators, resulting in higher operating costs from legal fees and risk mitigation.
Luckily for industry operators, there has been no shortage of demand in recent years. The industry has benefited from increased acceptance and legitimacy of medical marijuana products. According to IBISWorld Industry Analyst David Yang, “Revenue is expected to grow 23.1% in 2014 alone, largely due to a favorable regulatory environment, a steadily aging population and an increase in per capita disposable income.” Overall, the Medical Marijuana Growing industry is expected to experience annualized revenue growth of 16.2% to $2.1 billion in the five years to 2014. Adults aged 50 and older are a major industry market because they tend to require more healthcare services and treatment than the rest of the population. The number of adults in this age group has been steadily expanding and is expected to total 107.0 million in 2014. Consequently, medical marijuana demand from this demographic has risen during the past five years.
Medical Marijuana Growing industry revenue is estimated to increase over the five years to 2019. “The industry will remain at risk, however, until the federal government definitively changes its position on the legality of medical marijuana,” says Yang. Until then, a growing number of doctors and patients will likely turn to medical marijuana for treating health conditions such as Alzheimer's. Rising demand is also forecast to widen profit margins. Appealing margins and any legal advancement would entice new operators. Additionally, Colorado's relatively successful legal for-profit marijuana initiative can spur more states to legalize for-profit marijuana sales. Consequently, IBISWorld estimates that the number of firms operating in this industry will increase in the five years to 2019.
For more information, visit IBISWorld’s Medical Marijuana Growing in the US industry report page.
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IBISWorld industry Report Key Topics
The Medical Marijuana Growing industry’s establishments grow marijuana for medical use. Most operators are nonprofit collectives that provide medical marijuana to other collective members. Transactions are typically conducted on a donation basis because the sale and distribution of marijuana is illegal in most states that permit medical marijuana.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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