As Cannabis Moves Into The Mainstream, Illicit Market Endures

With the dramatic increase in access to cannabis, most users still aren’t using legal methods to obtain it. According to New Frontier Data, just 1 in 3 users are buying from established brick and mortar stores. For the balance of people consuming cannabis the most likely source remains the user’s friends.

These facts illustrate how strong the illicit market remains and shows the opportunity for companies to convert people to legal sales. New Frontier Data also found that consumers spend upwards of $89 billion dollars on both legal and illegal cannabis in the U.S. and this number includes cannabis consumed for medical uses. The study was concluded in September 2020 and since that date we’ve had a dramatic increase in the number of states with legalized cannabis for adults due to the election.

A portion of the reason consumers continue to consume illegal cannabis is many users live in medical-only states. “Most mid to heavy consumers will switch to shopping at brick-and-mortar stores very quickly after sales begin” the study says and many of the numbers are already heading in that direction. Those who have purchased from a physical store jumped from 27% in 2018 to 41% in late 2020 while the number of users purchasing from friends declined in a similar manner.

The overall numbers show the illicit market remains strong even as total sales outpace those of wine or spirits. New states deciding on the regulatory portion of cannabis are aware that tax levels, licensing fees and other factors must be kept in check in order to prevent a return to buying from friends and it appears that is happening both in California and Nationally. As more money is invested in eliminating the illegal market look for a dramatic rise in brick-and-mortar sales and an even greater increase in control and product quality. Quality is where we come in and we need partners who want to learn about how to build cannabis cultivation facilities.    

Cannabis Grow Builders has been involved in the emerging legal Cannabis Industry as a builder and developer of grow facilities since 2016. Daniel Stevenson and his team work with Cannabis Entrepreneurs and Solopreneurs to maximize the potential in their business while remaining on the cutting edge of constantly changing governmental regulations. Please reach out to us at 916-933-7333, via e-mail at daniel@cannabisgrowbuilders.com

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