Starbucks has become a household name in the United States and in many parts of the world too. But even popularity doesn’t last forever as there is now a “new kid on the block,” and it’s ready to take over the top spot as America’s commercial giant. In 2021, legal marijuana sales (590) surpassed the sales of Starbucks. The sales of legal cannabis have overtaken those of Starbucks by almost one-third!
How it happened
The sales of regulated cannabis and wholesale marijuana (390) in the US have surpassed the coffee giant’s North American sales significantly. This is despite the fact that Starbucks coffee is readily available to consumers in all 50 states. But only 39 states, along with the District of Columbia, have legalized the sales of some form of cannabis. Even the growth rate from 2021 to 2022 had cannabis leading Starbucks. Take, for instance, the fiscal year of 2021, which saw the annual revenue of Starbucks growing by 25%. But the cannabis sales climbed by 30% in the same year.
People use cannabis for different reasons, from helping them sleep to just using it recreationally. In the year 2021, cannabis sales increased as people started to turn to controversial the plant for various uses. The sales of OTC sleep aids, which also happens to be one of the most popular uses for cannabis, had an increase of less than 1%. Another common use of cannabis is for pain relief. For this purpose, the sales of OTC cannabis increased by 5%.
Cannabis sales for both adult and medical use grew by around 30% during the same period. But this increase isn’t completely medically-driven. The 2-year pandemic period also had consumers look to vices that they previously weren’t interested in. For instance, take the case of cigarettes. Last year, there was an increase in sales for the first time in 20 years. Current estimates put the legal cannabis market in the country at a slight advantage compared to the market of global opioids. But even with these statistics, there is still no way to determine the direct effect of cannabis legalization with regard to the use of opioids. Sales growth slowed down during the pandemic, which is likely due to limited hospital access.
The need for marijuana
Although Americans love a good cup of Joe, many now prefer to turn to cannabis when times get tough. And 2021 was a tough year for most of us, both mentally and economically. With these challenges, marijuana sales (590) have boomed. This is a significant event for marijuana manufacturers and business owners as it’s always a good idea to invest in marijuana products that consumers will look for in bad or good times. Marijuana is one product that consumers crave. Wholesale marijuana (390) can thrive even in difficult economic times, making it an exceptionally marketable product.
While stimulus payments and lockdowns helped the sales of weed minimally last year, this growth doesn’t seem to be an isolated incident. In fact, we can expect marijuana sales to reach up to $33 billion in 2022, which will be a growth of 32% from the year 2021. This data shows that marijuana is on a steady growth trend, and this could continue to outshine Starbucks and other iconic brands too.
Apart from already showing strong sales in the existing markets, several states have legalized the use of recreational marijuana this year. Because of this, sales are already growing even more. When New Jersey launches adult-use marijuana, we can expect sales to increase substantially in any market in the US. Although the past two years have come with uncertainty, marijuana sales enjoyed a steady growth rate. Also, the battle between federal and state lawmakers on whether or not to legalize marijuana has not made a big impact on the marijuana industry.
A growing trend
Factbook MJBiz is a website dedicated to cannabis research and business. Part of its agenda is to examine the growth of the industry of legal marijuana in the US and compare it to other major revenue sectors, including OTC medications, cigarettes, salty snacks, opioids, and even coffee, specifically Starbucks. Historically speaking, people consider marijuana a “gateway drug”. According to MJBiz research, they found out that while OTC medications and cigarettes outpaced marijuana sales (590) in 2021, for the first time, wholesale marijuana (390) made more revenue than Starbucks by a margin of $4B to $6.5B. The sales of legal cannabis are around $24.5B to $27B, while Starbucks in North America earned only $20.5B.
The research also showed that the industry of legal cannabis isn’t just beating Starbucks in terms of sales earned but also in its overall growth. The annual revenue of Starbuck in North America increased by 25% in the fiscal year of 2021. This does wonders seeing how much the Americans pay for their coffee and what they think will be the effect of the unionizing efforts when they occur in the country. But even if you don’t consider this, the important thing is that the sales of legal marijuana increased by 30%.
According to the research conducted by MJBiz, this growth in sales happened when the 39 states, including the District of Columbia, legalized some form of marijuana, be it for recreational or medical purposes. Although Texas isn’t included in the 39 states, it’s still considered the Land of Mah’ Rights and Business-First Texas and the Home of Personal Freedom. Texas hasn’t legalized marijuana yet. Even Oklahoma has legalized its medical use. Based on these changes, we can expect marijuana sales to continue to outdo that of Starbucks and other major retailers in the years to come.
The noticeable shift of nationwide opinions about the use of cannabis has moved more in favor of weed, and there still is a massive untapped market out there. In the 11 remaining states that have yet to legalize the use of cannabis, there is around 20% of the total population of the country. If the legalization of cannabis were to occur in those states right now, Starbucks simply would not be able to keep up with the new market giant.
