If one thing can be said about the pandemic, it was certainly not a bad thing for cannabis, an undertaking declared by many states to be essential, as numerous other sectors have stopped working to slow down the spread of COVID-19.
Global cannabis sales rose nearly 50% to $ 21.3 billion in 2020, according to a report released Tuesday.
The cannabis data and analysis firm BDSA has released its 2020 sales data on cannabis and predicts the future.
The 2020 figure was a 48% increase over sales of $ 14.4 billion in 2019.
BDSA now predicts global cannabis sales will grow to $ 55.9 billion in 2026, a compound annual growth rate of more than 17%.
Chris Boden, senior vice president of the cannabis division for Flux Insurance Services LLC, felt the impact on his business greatly.
“It’s going through the roof right now,” says Boden, who works at the Sacramento, California office. “I would just say in the last two months that I have written more premium than in the previous six months.”
It’s not so much that the number of policies he has sold has increased, but Boden said the average premiums per customer have risen as retailers have adapted to the pandemic by offering the pickups going, more deliveries, what more insurance necessary.
Kuber is one of the lines where Boden recently saw the biggest increase.
“Now they process payments online, place products online,” he said.
Of course, more cannabis sales mean increased revenue, and the increased revenue has increased premiums, he added.
“Ninety-nine percent of the businesses we work with were double or triple the revenue they did the previous year,” Boden said.
Norm Ives, marijuana leader at wholesaler Worldwide Facilities LLC, has a similar experience in terms of rising premiums per customer.
Ives said he could sell even fewer policies in 2020, but his income was higher and he said the premium is higher.
“It was a better overall policy,” Ives said, attributing the increase in part to the increase in revenue, as well as his years in the business that have borne fruit by attracting larger and better cannabis operators.
Ives noted that there has been a lot of talk in the marijuana industry about mergers and acquisitions, which may have occurred during the crisis.
He expects M&A activity to increase in the coming year, which will consolidate smaller operations but create larger multi-state operators to give potential deals to brokers like him.
“A growing and growing market is good for all areas, including insurance,” Ives said.
Micah Tapman, CEO of BDSA, said the figures beat earlier industry-wide forecasts, which were cautious due to the pandemic.
“Our previous forecast was conservative based on the expected economic downturn of the pandemic, but the industry not only survived, it thrived and legalized cannabis gained significant ground and exceeded our expectations in several markets,” Tapman said in a statement. said.
Legal cannabis sales in the US exceeded $ 17.5 billion in 2020 and grew 46% compared to 2019, while BDSA predicts that US sales would reach $ 41.3 billion in 2026.
Several mature markets experienced accelerated growth in 2020, the report shows:
- Colorado grew by 26%, doubling its 13% increase in 2019
- Oregon grew by 39%, up from 21% in 2019.
- Canada, the largest national market, grew by 61% in 2020 to more than $ 2.6 billion.
The medical and adult markets launched in 2019 and 2020 contributed $ 1.6 billion to spending in 2020 – $ 422 million was for medical and nearly $ 1.2 billion for adults, the BDSA report shows.
Five new U.S. markets legalized adult drugs or cannabis during the 2020 election: Arizona; Mississippi; New Jersey; Montana; and South Dakota.
BDSA expects four new medical and five new adult markets to launch in 2021.
Illinois, which launched adult use last year, saw its biggest dollar gain in 2020 rise by $ 784 million.
The top four market expansions were: California ($ 586 million); Florida ($ 473 million); Colorado ($ 451 million); and Oklahoma ($ 400 million).
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