Massachusetts’ marijuana legalization went into full effect this week.
Judging by the data, this is going to add significantly to the size of the U.S. legal marijuana industry.
First day sales racked in $440,000 according to the Boston Globe.
This sales number seems small, but it portends much bigger growth to come.
First, there are only two fully licensed legal marijuana stores in Massachusetts, one in Leicester and the other in Northampton.
These are sizeable towns located within driving distance of other towns, but they’re nothing close to Boston metro population center.
That means only a small fraction of the 6.6 million residents of Massachusetts have access to legal recreational use marijuana.
Despite that, first day sales came in at $440,000.
That’s a sales rate of more than $160 million.
Over time, as more licenses get issued and stores pop up throughout the state, those numbers will increase dramatically.
Looking at Nevada data, which has a little less than half the population of Massachusetts, we can see how much bigger.
Nevada’s marijuana sales total $425 million in its first year after legalization.
Just doubling that gets to $850 million first year for Massachusetts.
Although they are apples and oranges – different regulatory regimes, geography, timelines, etc. – we can tell Massachusetts could easily hit $1 billion in marijuana sales in less than two years.
At that rate $2 billion won’t be far behind as markets mature, social acceptance grows, and marginal customers who aren’t the types to line up on the first day of legalization start finding and consuming products tailored for them.
In the big picture, this is just part of a much larger trend that further proves the U.S. marijuana market has the potential to grow to $100 billion (if Massachusetts is 2% of the population and is a $2 billion market, well…) and it’s going to be here in just a couple of years.