If licensed marijuana dispensaries were taxed on a federal level, they would be as profitable as Apple.
According to the latest report by the ArcView Group, a cannabis market research company located in San Francisco, the US retail cannabis market could reach iPhone levels of profitability if they were to be taxed like Starbucks, Apple and other similar specialty stores.
The report states that dispensaries could enjoy a 12% after-tax profit margin, which would put them in the same bucket as other, more mainstream high end retail markets. Currently, dispensaries average $2 million in revenue per store.
Quoting Troy Dayton, ArcView CEO:
“This report shows that retail cannabis could be as big as the iPhone. It’s clearer than ever that there is a pot of gold at the end of the rainbow for those investors and operators who are willing to deal with the uncertainties and difficulties of current regulations.”
This comes as no surprise, especially considering how rapidly all cannabis sub-markets are developing.
Adult-use markets are predicted to be the double the size of the medical market by 2021, with $14.9B in sales.
US hemp market, for example, has reached $688 million in sales in 2016 with a 55% predicted compound growth rate over the next five years.
Medical and recreational cannabis in US is no different as retail sales are projected to grow to $30 billion by 2021 , forcing many LP’s to scale up their operations in order to meet the current and future demands.
Michigan could be among the top recreational marijuana markets in the US
During the latest MJBizCon, held between November 14-17 in Las Vegas, more than 18,000 participants gathered to find their role in some of the emerging cannabis markets.
Among them were a hefty number of vendors who are interested in Michigan as a potentially lucrative recreational marijuana market.
Chris Walsh from Marijuana Business Daily expressed his opinion in an interview for Detroit Free Press:
“Michigan would be a massive market. It would definitely rank up there with the top recreational marijuana markets now. You’ve got cannabis friendly culture there, you’ve got a fairly big state and I think you could draw others from that region as well,” said Walsh.
Currently there are more than 270,000 medical marijuana card holders in Michigan alone, which makes it the second biggest medical marijuana state in the US.
The Michigan legalization plan is due to qualify for 2018 ballot.