Medical Cannabis Demand Expected to Grow

According to Arcview Market Research and BDS Analytics, the global spending on cannabis is expected to reach USD 57 Billion by 2027. Of that rather large sum, 33% is expected to be spent on medical cannabis alone. With all the furor for recreational cannabis that has overtaken North America, it is easy to forget the significance of its medical counterpart. With currently only 9 states, and Washington DC., having legalized recreational cannabis and with medical cannabis being legal in 31 states, and Washington DC., there is a lot of potential for the market.

Currently, the largest cultivators for cannabis, be it recreational or medical, are either in the West Coast of the United States or across the Northern border, in Canada. According to growersnetwork, the largest current grower on the West Coast and in the United States is Los Suenos Farms, a 1,428,000 sq. ft. facility in Avondale, Colorado. Los Suenos is a private company and is bound, like all other cultivators, from delivering its product across state lines as cannabis remains a Schedule 1 substance. On the other side of the country, growersnetwork reports that GrowHealthy LLC is the largest cultivator on the East Coast, with a 200,000 sq. ft. facility in Lake Wales, Florida.

Meanwhile, in Canada, The Green Organic Dutchman (OTCQX: TGODF, TSE: TGOD) and Canopy Growth Corp. (NYSE: CGC) are competing to be the largest producers with 620,000 sq. ft. and 598,000 sq. ft, respectively.

A major reason why the East Coast is lagging behind the West in terms of facilities is due to the order of legalization that the United States has followed. In terms of legalizing medical use of cannabis, California did so in 1996; Washington, Oregon and Alaska did so in 1998, before Colorado and Nevada passed medical legalization in 2000. By comparison, Maine was the only state on the East Coast to have passed medical legalization before 2000, doing so in 1999. As such, the West Coast has had a major advantage in terms of how long the market has been active and the size of the markets that have been opened to cannabis companies.

However, the East Coast is catching up. Massachusetts had legalized medical usage in 2012 before New Hampshire did so in 2013 and New York and Maryland followed suit in 2014. Pennsylvania, Ohio and Florida all legalized medical cannabis in 2016.

According to New Frontier Data, via Statista, the Massachusetts market is expected to see approximately USD 1.37 Billion in cannabis sales by 2025, compared to Maine’s USD 432 Million in sales for the same year. As the market expands on the East Coast, demand will grow and the need for flower will surge. This is where AmeriCann Inc. (OTCQB: ACAN) comes in. The Company recently broke ground on a nearly 1 Million sq. ft. facility in Freetown, Massachusetts, just 47 miles from Boston, to be the location for its Massachusetts Medical Cannabis Center (MMCC). It is not only expected to become one of the largest cultivation facilities in the country but also a leader in cultivation technology and lean practices.  The initial phase (Phase 1) will consist of building out a 30,000 sq. ft. facility to engage in cultivation, processing and research, with an agreement already been reached to lease the initial facility to Coastal Compassions, Inc. (CCI). The facility will feature a team of horticultural, big agricultural, lean manufacturing, cannabis cultivation and consumer production as well as manufacturing expertise, according to Tim Keogh’s speech at the groundbreaking.

While cross-state delivery is still prohibited by the Federal government, the upcoming facility will allow AmeriCann to establish a foothold in the large Massachusetts market, before eventually expanding if the Federal prohibition is lifted.

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3 Comments
  1. Adam Putz 3 weeks ago
    Reply

    Medical Cannabis availability leads to a decreased number of opioid deaths.

  2. Jeanuel D. 2 weeks ago
    Reply

    Medical Cannabis is a great addition to treatment plans for veterans with PTSD. #TrusttheGanja

  3. Ingmar M. 2 weeks ago
    Reply

    Medical cannabis provides an important ‘new’ set of pharmacologic tools for health care; a lot to be learned to be more specific and precise #CannabinoidScience #MolecularReality -#SharedFacts

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