With a recent wave of states legalizing recreational and medical marijuana, exciting investment prospects and growth opportunities are cropping up all over the country. California has been a major focus of that attention, given the vast size of the state and its existing and potential cannabis market sizes.

But beyond the Golden State, many up-and-coming markets are seeing — or expected to see — excellent growth, and should not be overlooked. Others remain caught up in the complicated process of implementing newly passed cannabis laws (which has caused delays in getting product into consumers’ hands) and should be approached with more caution. Here, Brightfield Group sheds light on some of the states that have been mired in bureaucracy, and those that might be the rising stars, among the newer markets. (Editor’s note: This information is current as of press time.)


Rapid growth and great potential

Though medical marijuana was legalized in Illinois in 2013, delays in licensing and government hurdles caused the market to take off only last year. However, that growth is promising, given the state’s vast population of 12.8 million, according to 2016 data from the U.S. Census Bureau.

In 2016, the Illinois medical marijuana market grew 20 times over the previous year — to $35,931,418 — and per Brightfield’s projections, it is poised to expand fourfold in 2017, making it a $145 million market with great potential for continued growth.

New York:

Slow, but steady growth

With a population of 19.7 million, New York is another behemoth among the states to legalize marijuana in recent years. However, New York’s progress has been slow, with less than $15 million in sales in 2016 despite having legalized medical marijuana in 2014. Barriers such as limited qualifying conditions and restrictions on product types have restricted patient access and interest in the past. New York’s Department of Health has been working to dismantle some of these obstacles by increasing the list of qualifying conditions, recently adding chronic pain to the list, and allowing nurse practitioners to write recommendations, among other adjustments.

However, the restrictions on product types remain (the state does not allow smokable or edible cannabis products), and the government is intending to award additional licenses, which would make it even more difficult for existing businesses to survive. Given the extremely high licensing fees and the high start-up costs for New York licenses, cannabis businesses in this state must be prepared to continue battling for profits for years to come.

Photo: Thinkstock.com


Facing roadblocks, but determined

Florida voters showed their support for medical cannabis in 2016 with an unprecedented 71 percent of votes in favor of expanding the existing CBD-only program to a full medical marijuana program, opening it up to patients with a much larger list of qualifying conditions. Despite this wide support, the legislature has taken a cautious approach in setting up both the CBD-only market and the full medical market. The state’s initial highly restrictive market finally launched in the second half of 2016, and sales have been slow to pick up. By 2021, however, with the expected increase in licensed dispensaries, greatly improved patient access, as well as improved diversity and availability of product, Brightfield projects sales will reach $713 million, making it one of the largest medical markets in the country. Florida’s regulatory environment may require patience, but it is worth the wait.


A slow start with great promise

Though medical marijuana was legalized in the state back in 2012, today there are only 12 dispensaries licensed to sell to medical marijuana patients in Massachusetts (per state data). Regulatory progress has moved at a slow pace on the recreational front as well. Following voter approval of recreational cannabis use in November 2016, the Massachusetts House and Senate came to a compromise on legislation regarding regulation in July 2017, following weeks of talks and missed deadlines. The new bill will allow government officials in towns that voted against marijuana legalization to ban industry businesses from operating in the state until December 2019, while requiring government officials in towns that voted for legalization to place any proposed bans on a local ballot for approval by voters (bit.ly/2vDctxZ). Despite these legislative delays and barriers, patient numbers have continued to grow in the state; Massachusetts is expected to have a $96 million cannabis market in 2017, and recreational sales are expected to clear $330 million by 2020.


Growth hampered but strong

Like Massachusetts, Maine voted to legalize recreational cannabis in 2016, but by a very thin margin, even leading to a vote recount. Here as well, the state legislature has delayed the licensing of retail cannabis shops until 2018. The state’s support of recreational marijuana is lukewarm and proponents are battling with the state over implementation, thus its growth is not expected to reach full potential in the near future. But despite Maine’s smaller population and the aforementioned barriers to its growth, medical marijuana patient numbers continue to rise and per Brightfield’s data, the state had a healthy market size of nearly $90M in 2016 — which is projected to double by 2019.

Jamie attained a B.A. in International Studies and an M.A. in International Development from the University of California, San Diego. Since early 2015, she has been a market analyst with Brightfield Group, where she performs quantitative and qualitative analyses of various aspects of the U.S. marijuana markets.