Minnesota

Projected Annual Sales of Legal Marijuana in Minnesota to Hit $1.5B by 2029, Analysis Shows

2023-06-20

Minnesota's budding cannabis industry has been projected to reach a staggering $1.5 billion in yearly sales by the end of the decade, serving more than 700,000 customers annually. This forward-looking prediction has been presented by Vicente LLP, one of the leading cannabis law firms in the country.

"The growth of Minnesota's cannabis market will be a lucrative opportunity for people interested in the adult-use cannabis market," said Travis Copenhaver, a partner at Vicente LLP. This announcement came during a well-attended seminar on cannabis entrepreneurship hosted by the Surly Brewing in Minneapolis.

Minnesota's unfolding story of legal cannabis is expected to mirror patterns seen in Colorado and the other 21 states where adult-use cannabis has been legalized. It's anticipated that the market's early days will be marked by high prices and limited supply as the industry tries to keep pace with demand. However, as the market evolves, prices will inevitably drop, saturation will set in, and yearly sales are predicted to peak around $1.5 billion.

Brian Vicente, founding partner at the law firm and a key figure in writing Colorado's marijuana legalization ballot initiative over a decade ago, points to Minnesota's unique positioning for the onset of recreational marijuana sales. The state had already taken strides in the legalization of low-dose, hemp-derived THC edibles and beverages in 2022, thus familiarizing the Minnesota populace with such products in advance.

"Minnesota stands to attract a significant amount of tourist traffic from neighboring states like Iowa and North Dakota, as consumers venture to purchase Minnesota's cannabis products," Vicente said.

Interestingly, Vicente's study estimates around 650,000 Minnesotans, about 15% of the population aged 21 and over, will consume cannabis on a monthly basis. However, the shift of users from illegal to legal markets may take time. It is predicted that it may not be until 2030 when a vast majority of users are purchasing from dispensaries instead of illicit dealers.

Looking to similar markets for context, Michigan, which holds almost twice the population of Minnesota, reported annual marijuana sales hitting the $2 billion mark in 2022, with a projected rise to $2.7 billion this year. In contrast, Colorado, whose population closely mirrors Minnesota, logged $1.7 billion in sales in 2022, down from its peak of $2.2 billion a year prior.

These impressive sales figures could translate into a significant revenue stream for the state. Minnesota's Department of Revenue predicts that recreational marijuana sales could generate about $107 million in yearly tax revenue for the state and an estimated $21.5 million for local governments by fiscal year 2027.

The progression of Minnesota's cannabis market could be a blueprint for other states mulling over the legalization of adult-use cannabis. It's an unfolding narrative of economic growth, legal challenges, and societal shifts that is keenly watched by investors, policymakers, and consumers alike.

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