The industry has benefited from the increased acceptance of medical marijuana products.
New York, NY (PRWEB) June 10, 2014
For decades, all marijuana transactions in the United States were conducted under implicit or explicit prohibition. However, states have increasingly moved to legalize nonprofit marijuana growing for medical purposes, as well as to 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, however, due to aggressive prosecution of medical marijuana growers and dispensaries by the Drug Enforcement Administration. According to IBISWorld Industry Analyst David Yang, “This sort of intervention has increased uncertainty for industry operators, resulting in higher operating costs from legal fees and risk mitigation.”
Luckily for Medical Marijuana Store industry operators, there has been no shortage of demand in recent years. The industry has benefited from the increased acceptance and legitimacy of medical marijuana products. “Revenue is expected to grow 63.1% in 2014 alone, largely due to a favorable regulatory environment, a steadily aging population and an increase in per capita disposable income,” says Yang. Overall, the Medical Marijuana Stores industry is expected to experience annualized revenue growth of 20.5% to $2.6 billion in the five years to 2014. Chronic illnesses have become more prevalent as the population continues to age, driving demand for medical marijuana. Additionally, the development of edible cannabis products has helped attract consumers who are unfamiliar with marijuana products or averse to smoking. Indeed, edible products are projected to be a growth segment for the industry in the coming years.
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. 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 at an average in the five years to 2019.
For more information, visit IBISWorld’s Medical Marijuana Stores in the US industry report page.
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IBISWorld industry Report Key Topics
Stores in the Medical Marijuana industry primarily retail medical marijuana (by prescription only).
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