Their conclusion was based on more than 300 survey responses and interviews with market participants. At present medical marijuana markets exist in seven states (California, Colorado, Michigan, Montana, Oregon, Washington and New Mexico) and the business will increase as it expands to remainder of the 16 Legal Medical Marijuana States and DC.
24.8 million People are eligible to receive a recommendation and purchase marijuana legally under state laws, but only, approximately, 730,000 people actually do. Therefore, there is a lot of room for growth. The report predicts that the current marijuana markets will double in the next five years due a combination of more legal patients and laws that better facilitate licensing and sale of medical marijuana.
The authors also estimate that medical marijuana sales can increase about 5 times and reach $8.9 billion if 20 more states allow its sale for medical use. This is an interesting hope but is it really possible and how long will it take?
Currently, medial marijuana is priced at $200 an ounce as advertised by local dispensaries in Colorado. At this price marijuana ($200) is 6 times more expensive than Silver ($34 per ounce) but 7 times less pricey than Gold ($1490 per ounce).
It took silver and gold 10 years to increase, approximately, 5 times in value:
From 2001 to 2011, gold prices increased about 6 times from $264 to $1564.
From 2001 to 2011, silver prices increased about 5 times from $8.50 to $46.
It is also notable that increase in prices of silver and gold is driven by a number of deteriorating economic and political factors and most of the increase occurred in the past three years since economic crash of 2008. In addition, the supply of these metals is limited by what is available on earth and how much can be extracted.
On the other hand, medical marijuana’s growth is dependent on legal regulations. There are hundreds of businesses around the country that cultivate and sell medical marijuana to customers. Many of these businesses emerged in the wake of the Obama Administration’s policy to give low priority to federal prosecutions of individuals and business complying with state medical marijuana laws. That impression led advocates to believe the U.S. was easing restrictions on medical marijuana. However, it is obvious from a number of recent raids by DEA, Obama never promised anything and it will continue to be an on going struggle to the advocates of medical marijuana.
It may be a long time before medical marijuana is legalized all across the country which will naturally lead to the growth of related businesses.
