USA | This U.S. City Just Made Marijuana History by Outselling Alcohol 

 

This posh vacation destination is setting new standards for the pot industry.

Few, if any, industries are growing with the speed and consistency of legal marijuana. ArcView, a leading cannabis research firm, estimates that North American sales growth will average 26% through 2021, resulting in almost $22 billion in annual sales. Meanwhile, a Marijuana Business Daily report from 2017 forecast 45% sales growth for legal weed in the U.S. market in 2018, which is probably a result of California opening its doors to recreational cannabis sales as of Jan. 1, 2018. The point is that regardless of the source, sales growth is through the roof.

Public opinion is a big reason marijuana sales have taken off. Survey after survey continues to show nothing short of strong support in the U.S. for the legalization of cannabis, with even more overwhelming support for medicinal weed. As long as the public favors the expansion of cannabis, sales are expected to continue growing.

A person rolling a cannabis joint next to dried cannabis.
IMAGE SOURCE: GETTY IMAGES

In Colorado, which was among the first two states — along with Washington — to legalize adult-use pot in November 2012, aggregate cannabis sales continue to soar. Following just shy of $700 million in combined medical and recreational sales in 2014, the Rocky Mountain State reported $1.49 billion in sales in 2017. Most notable, recreational weed sales catapulted 30% higher, with overall sales increasing by nearly 15% from 2016. The state wound up securing a whopping $247.2 million in tax revenue from marijuana sales, which is cash it’ll use to fund schools, law enforcement, and in-state drug assistance programs.

This U.S. city just made marijuana history

Perhaps not surprisingly, Colorado also houses what’s believed to be the first city in the U.S. to sell more marijuana over the course of a year than alcohol. As reported by the Aspen Times, licensed vendors in posh ski resort town Aspen, Colorado, wound up selling a combined $11.3 million in pot in 2017, compared to just $10.5 million for liquor stores (keep in mind, this doesn’t account for the alcohol sold in restaurants and bars).

The data, which was culled from the Aspen Finance Department’s year-end sales tax report for 2017, showed that cannabis sales grew by 16% from the prior year and enjoyed the quickest growth rate of any of Aspen’s 12 retail sectors. Admittedly, though, it remains a small player in Aspen’s $730 million retail industry. Said Matt Kind, a Boulder businessman and host of the CannaInsider podcast:

I think it’s meaningful for a couple of reasons. One in particular is when people are visiting Aspen and adjusting to a high altitude, some don’t drink for the first couple of days. And I think people are looking for something different from alcohol, which is essentially poison, and marijuana is botanical.

A group of friends holding skiing equipment while on vacation.
IMAGE SOURCE: GETTY IMAGES.

It also demonstrates the noted shift in consumer opinion. Once considered taboo, cannabis is now a top-selling vice in luxury ski town Aspen. Even those groups who’ve opposed the expansion of cannabis in the past have softened their positions in recent years. National pollster Gallup finds that more Republicans support legalization now than during any previous polling. Likewise, even though seniors aged 55 and up still oppose legalizing weed, their opposition to such a move has shrunk in recent years.

History aside, the U.S. is no longer a pot-friendly environment for investors

While it’s incredible to see cannabis outselling alcohol in any city or format, investors have to realize that even with increasing pot sales in the U.S., the odds are stacked against success.

Though the U.S. market could easily be the world’s most lucrative for legal weed sales, there’s virtually no chance of that happening under the current administration. Marijuana is firmly a Schedule I substance, meaning it’s wholly illegal at the federal level, is prone to abuse, and has no recognized medical benefits. The U.S. Drug Enforcement Agency reviewed cannabis in 2016 and chose to keep its scheduling unchanged. With Congress having other pressing matters to address, pot reform simply isn’t on the agenda.

Making matters worse, Attorney General Jeff Sessions has decided to wage war on the marijuana industry. Having previously attempted to roll back protections for medical-marijuana businesses, Sessions announced on Jan. 4 that he’d be rescinding the Cole memo. This was a loose set of “rules” that legalized states agreed to abide by in order to keep the federal government off their backs. Its removal paves the way for state prosecutors to use their discretion in bringing cannabis charges against individuals and businesses, even in legal states.

A lit cannabis joint in front of the red Canadian maple leaf.
IMAGE SOURCE: GETTY IMAGES.

Right now, the blueprint for success in the marijuana industry continues to be Canada. Our neighbor to the north legalized medical cannabis in 2001, with the industry being overseen by Health Canada. Legislation is also working its way through parliament that could green-light recreational pot for adult sale by July 2018.

Not surprisingly, many of Canada’s growers are expanding as quickly as their bankrolls will allowAphria (NASDAQOTH:APHQF), one of just two marijuana stocks to have been profitable in each of the past two years, is working on a more than $100 million, four-phase organic expansion that’ll feature 100,000 kilograms of dried cannabis grown annually over 1 million square feet when complete in Jan. 2019. Aphria also recently partnered with Double Diamond Farms to add another 120,000 kilograms of annual production. Companies like Aphria in Canada are leading the way for pot progressivism, and that’s truthfully where investors should consider putting their dollars.

Source: This U.S. City Just Made Marijuana History by Outselling Alcohol — The Motley Fool

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