At the moment, more than 100 million residents in the United States live in a state that has legalized recreational cannabis, with a whopping 95% living in a state with a legal medical cannabis system in place. Cannabis multistate operators are readying themselves for the next huge stock increase, which is expected to happen even without a change in federal legislations.
Marijuana is fast closing the revenue gap, especially with the emergence of profitability, after the huge infrastructure spending that began in 2018 and 2019. Trading indexes show favorable valuations throughout this season, despite the imminent federal legislative gridlock.
Marijuana revenues in the United States increased significantly between 2014 and 2020, moving from $1.9 billion to $17.5 billion, even without the enactment of federal legislations such as the SAFE Banking Act. Recent forecasts from “Forbes” show that by 2025, the U.S. marijuana market will have reached $43 billion, which is quite a jump from the $29 billion prediction from a few months ago.
With more states across the country legalizing the herb for recreational and/or medicinal use, 2021 is set to be a good year, with the cannabis market expected to see an even larger increase in the coming year. Additionally, as more demographics such as seniors get on board with marijuana therapies, the industry expands faster and grows even stronger.
The quality of companies now operating in the marijuana market is considerably different from companies that were operating in the market in 2015 when the U.S. Marijuana Index begun. Small companies are now focused on profit making, which entails starving multistate operators of capital markets with profitability also being the main objective of larger and better-developed multistate operators.
Infrastructure building as well as mergers and acquisitions have also increased substantially, with both global and U.S. capital markets responding to this by increasing their cannabis services. The United States is receiving the biggest benefit of private equity financing because of the increased fundamentals of cannabis companies and the huge revenue stream that’s gaining momentum.
Whether we like it or not, the profitability model brought by marijuana federal legalization in Canada is here to stay. Despite most monies being injected into companies in the United States, investing in profitable operations is still the main aim, especially as infrastructure and M&A investments are expected to increase annually in this particular market.
Until federal regulations catch up to consumer preferences, marijuana sales will continue increasing, more states will legalize the herb, and companies will continue to hit record highs.
When you see industry players such as Chalice Brands Ltd. (CSE: CHAL) (OTCQB: CHALF) report nearly 200 people on their payroll, it appears to be a clear sign that the sector is growing and things are likely to keep looking up for years to come.
NOTE TO INVESTORS: The latest news and updates relating to Chalice Brands Ltd. (CSE: CHAL) (OTCQB: CHALF) are available in the company’s newsroom at https://cnw.fm/CHALF
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