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Why the U.S. Cannabis Industry Will Surpass $30 Billion in 2022

New report from Headset says country will near Canada's annual growth rate for the plant.

This story originally appeared on Leaf Report

Recent waves of medical and adult-use legalization across the United States suggest the cannabis industry is set to outpace its already impressive numbers in the months to come. A new report from nationally renowned research firm Headset has offered a specific target for industry pros and politicians to expect: the Seattle-based marijuana analytics firm said in its latest forecast that sales could surpass $30 billion by the end of 2022.

RELATED: Report: Global Cannabis Market to Surpass $42 Billion by 2024

Thank newly legalized states

Headset’s projections, which updates a similar report from the first quarter of this year, factored upcoming adult-use programs in New York, New Jersey, Connecticut and New Mexico as well as a medical program in Alabama, into its updated figures from earlier this year. All five states are scheduled to launch their new industries in the coming year.

“The large influx of new states played a key part in our adjusted growth projections,” said Sami Toivola, Headset’s leading data analyst for the report.

The report, released Friday, projected the U.S. industry will expand 27.7 percent – from $18.5 billion to $23.6 billion – by the end of this year and an additional 29.3 percent to $30.5 billion in 2022.

RELATED: Cannabis Drinks Are Projected To Make $2 Billion This Year

Flower still at the top

Toivola said flower will increase its market share as the main driver of retail marijuana, accounting for over 47 percent of all product sales in 2022, up from 42 percent this year. Vape pens and cartridges stand alone in second place with roughly 22 percent of the sales market while edibles, pre-rolls and concentrates each account for about 10 percent.

A bevy of lesser-purchased products, like tinctures and sublinguals, infused beverages, topicals and capsules, combine to account for less than 4 percent of the market.

Headset projects the smaller Canadian market will reach $5.6 billion in sales by the end of 2022, up from about $4 billion by the end of this year. Canada’s growth rate is almost double the U.S. growth rate from 2020 to 2021, but the growth rates are much closer for 2022, the research firm said.

Researchers attributed the wide difference in growth rates between the two countries to Canada’s relatively small cannabis market size. And while the U.S. federal government still bans the plant, the cannabis market of many individual states is more “mature” than markets in Canadian states.