The U.S. Cannabis Sector May Finally Start To See Some Light At The End Of The Tunnel

Although 2021 has been a record year for the United States (US) cannabis market, the sector has recently come under considerable pressure. This comes as the growth prospects and underlying fundamentals of leading US multi-state operators (MSOs) have been rapidly improving.  

Canaccord Genuity recently published a report on the US cannabis market that we consider to be favorable and have highlighted 5 major takeaways from it:

1. In 2022, the broker-dealer expects the US cannabis industry to be a more than $30 billion market
2. The firm expects states with a legal cannabis market to generate approx. $24 billion of sales by the end of 2021
3. A major growth driver in 2022 is expected to be related to continued market expansion as well as the opening of new recreational markets 
4. Canaccord expects the highest growth markets in 2022 will be California, Illinois, Pennsylvania, Florida, Arizona, New Jersey, Massachusetts, Michigan and New York
5. When compared to 2021, these nine markets are expected to generate more than $4 billion of additional revenue in 2022

Canaccord: Valuations Have Never Been More Attractive 

Based the projected growth profile of the US cannabis industry, Canaccord believes that MSOs have never been more attractive from a valuation standpoint. We agree with the broker-dealer’s view of the US cannabis industry and continue to closely monitor the market. 

Going forward, we believe the biggest potential catalyst for the US cannabis industry would be federal decriminalization or legalization. The rhetoric around this has improved and cannabis is one of the few topics that have bi-partisan support. 

From large corporations like Amazon and Uber expressing support for legalization to the opening of new medical and recreational markets, we believe the US cannabis industry is reaching an inflection point. We believe the combination of attractive valuations and an improving regulatory environment makes the US cannabis industry an attractive opportunity and continue to have a bullish outlook on the market. 

If you are interested in learning more about the US cannabis market, please send an email to support@technical420.com with the subject “The US Cannabis Market” to be added to our distribution list. 

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