NY alone believes its market could exceed $3 billion by 2020
This week, the Cannabis Control Commission of Massachusetts, the state’s marijuana regulatory agency, released sales figures for the first two months of legal retail sales that began on November 20. The figure of $24 million shouldn’t be all that surprising.
In 2018, California rang up $2.5 billion (though the figure was less than predicted). Colorado topped $1.4 billion in sales. Washington’s totals exceeded $1.5 billion. Even if Massachusetts’ cannabis sales totals in 2019 failed to rise above those of the opening two weeks, the figure would still soar past a half-billion dollars. Undoubtedly, the retail market can look forward to a huge boom, in the Bay State and everywhere else in the East.
Let’s talk population for a minute. California is huge, 770 miles long from north to south, with approximately 40 million residents. Washington has about 7.5 million and Colorado has less than 6 million. The other western states that have legalized recreational cannabis are Oregon, Nevada and Alaska, with populations of 4 million, 3 million and 740,000 respectively.
Now let’s discuss the East Coast and consider the so-called “Eastern Corridor.” It’s a 440-mile long megalopolis that stretches along the Atlantic Ocean from Boston to Washington D.C. and includes New York City, Philadelphia and Baltimore. With a population approaching 60 million residents, the Corridor is the most densely populated region in America, encompassing just 2 percent of the nation’s total land area, but comprising 18 percent of the nation’s population.
Now let’s add up the total (approximate) populations for the Northeast and Mid-Atlantic states: New York (20 million), New Jersey (10 million), Massachusetts (7 million), Connecticut (3.5 million), Maryland (6 million), New Hampshire and Maine (1.3 million each), Delaware and Rhode Island (1 million each), and Vermont and Washington D.C. (700,000 each).
That’s well over 50 million residents in a far smaller area than California. And if we add Pennsylvania to the mix, with 13 million residents, the potential legal marijuana market will, without a doubt, dwarf that of the West Coast.
Although only Massachusetts, Maine, Vermont and the District of Columbia currently allow legal, adult use of cannabis for recreational purposes, it hasn’t stopped other states from dreaming. All of them have projected potential whopping sales figures.
New York believes its market could exceed $3 billion by 2020. New Jersey projects $1 billion. Other states in the region are projecting sales in the hundreds of millions of dollars if recreational cannabis was legalized. Many are already reaping the tax benefits of legal medical marijuana programs.
A study by the Tax Foundation estimates that tax collections from marijuana could generate $5.3 billion annually if all states taxed the drug at a rate of 15 percent. Understandably, lawmakers are seriously considering following the example of other legal states. The potential tax revenue is enormous and could reduce or close the budget gaps that so many states experience. Furthermore, legal states have seen an uptick in tourism, which further spikes the economy.
Basic competition may speed the process. When the residents of the five states that are contiguous with Massachusetts (New York, Connecticut, Rhode Island, New Hampshire and Vermont)—all of which still prosecute cannabis “crimes”—cross the border to safely purchase legal cannabis, their home states lose money.
Governor Andrew Cuomo of New York seems to recognize this fact. Last month, he stated: “It is legal in Massachusetts. It’s going to be legal in New Jersey. So, it’s not really ‘is marijuana going to be legalized?’ It is going to be legalized. For New York to be in between Massachusetts and New Jersey, and say ‘We don’t believe it should be legal…’ It is legal. You’ll just force people to drive to Massachusetts or New Jersey and come back to this state and use it in this state.”