Barclays estimates US weed market would be $28 billion if legalized today, growing to $41 billion by 2028

KEY POINTS
  • “We estimate that the total US cannabis market, if legalized today, could be worth $28 billion, increasing to $41 billion by 2028 on a pre-tax basis,” Barclays analysts say in a note.
  • The analysts found that marijuana tax revenues are already ahead of alcohol tax revenues in Colorado, Washington state and Nevada.
  • U.S. marijuana companies are jockeying for position with the expectation that weed will be legalized across the nation.

Marijuana would become a major sector overnight if legalized across the nation, with tens of billions of dollars in revenue for governments at all levels, Barclays said in a report Wednesday.

“We estimate that the total US cannabis market, if legalized today, could be worth $28 billion, increasing to $41 billion by 2028 on a pre-tax basis,” Barclays analysts said in a note to investors.

At $41 billion, the cannabis market “could generate almost $28 billion of tax revenues across all levels of government” if taxed at the same level as tobacco, Barclays said. The analysts looked at the three states where cannabis is legal — Colorado, Washington and Nevada — and found that tax revenues from pot are already ahead of alcohol tax revenues and, in the case of Colorado, already exceeding tobacco tax revenues.

“While no bonds backed by cannabis tax revenues have been placed thus far, if federal approval is granted, the cannabis muni bond market will likely flourish, amounting to billions if not tens of billions of dollars, in our view,” Barclays said.

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