Wall Street Analyst Says Weed Could Be Worth $47 Billion in 10 Years

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The U.S. legal marijuana industry could be worth at least $47 billion within 10 years, according to Wall Street analyst Nik Modi.

Modi wrote to investors of RBC Capital Markets on Wednesday that U.S. estimates of legal pot sales are nearly as lucrative as spirits and wines sales. According to the report, current spirit sales in the U.S. is around $58 billion, with wine sales coming in at $65 million. Modi says that recreational marijuana use is driving the market growth for legal marijuana sales.

Marijuana concentrates and edibles seem to be replacing marijuana flowers and smokable marijuana sales. Recreational marijuana is legal in Colorado and has been for four years, however, sales for smokable marijuana dropped by 24 percent. Marijuana flower sales dropped down to 46 percent from 70 percent in the state.

Banker Says Decriminalization Will Increase Sales

The investment banker seemed unaffected by the decrease in Colorado's marijuana flower sales and predicts that the marijuana market will continue to increase its worth as states legalize the drug. "We believe further US decriminalization of cannabis including for recreational use is very likely over time. It ultimately starts with US voters who across demographics are supportive of cannabis legalization," he noted.

Voters legalized recreational marijuana in California, and the state implemented legal recreational marijuana sales in January. According to the California Department of Tax and Fee Administration, the state's pot sales for the first quarter totaled more than $60 million. The state earned more than $32 million in tax revenue from marijuana sales and cultivation taxes.

Politicians are beginning to back marijuana legalization as support for legalizing the drug increases. Polls indicate that at least 61 percent of Americans support legalizing marijuana, and politicians have taken notice. Both Republican and Democratic senators introduced legislation to protect legal marijuana states from federal prosecution.

Modi also notes that the maker of Corona, Constellation Brands, is on the right path by investing in Canopy Growth, a Canadian cannabis company. The beer and spirits company invested $4 billion in the Canadian company recently, sending stocks for Canopy Growth to increase by at least 33 percent. "We think this is exactly the type of move that more companies should be making," wrote Modi.

ArcView Market Research also predicts high revenues from legal weed and estimates that the total economic output from legal marijuana sales will reach $40 billion in just three years. With so much money involved in legal marijuana sales both at home and abroad, it's no surprise that investors are lining up to invest in the pot pie.