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When 2018 began, the legalization of recreational marijuana in Canada was not yet guaranteed. The passage of the eagerly awaited Cannabis Act in June initiated a flurry of activity as producers began preparing for the official legalization date of October 17. This new and highly lucrative industry is just beginning to ramp up, and development may extend for several years.

Brightfield Group, a Chicago-based cannabis research firm, recently released its first analysis of recreational marijuana sales in Canada based on actual numbers. Data revealed that the combination of recreational adult-use and medical marijuana sales combined was $210 million from the legalization date of October 17 through the end of 2018. Based on this data, Brightfield Group projects sales in Canada to reach $5 billion by 2021. Another American cannabis research firm, New Frontier Data, projected the industry’s valuation by 2026 to be $9.2 billion.

While many Canadian producers and investors are eager to begin turning huge profits, the country’s marijuana industry is still in its early stages and has plenty of room to grow. Consider that many producers were sitting on the sidelines until the Cannabis Act was passed in June because they were unwilling to heavily invest in cultivation equipment and infrastructure for an industry that was not yet legalized.

As one of many signs that production was not yet up-to-speed in Canada on day one, a Winnipeg dispensary was forced to close its doors on the first day of legalization because it ran out of product. Furthermore, Canada Health has been inundated with applications from potential cultivators and sellers. At one point, the backlog of applications for a permit was over a year. Recreational marijuana sales in Canada are expected to skyrocket when these and other similar hurdles are overcome. Producers are also anticipating a boost when they are able to sell edibles and THC-infused beverages in stores and when federal Cannabis marketing regulations are updated.

Canada’s marijuana industry is a step ahead of the cannabis industry in the United States, where legalization is progressing state by state and is also not yet up to its full potential. Some states have legalized both medical and recreational marijuana, but others only permit medical marijuana use as treatment for specific conditions. Many other states have not yet taken any legalization steps. However, a Pew Research Center Poll states that 64 percent of Americans are in favor of legalization.

As an indication of the tremendous potential for growth in cannabis sales across Canada and the United States, cannabis sales in Colorado alone are approximately $1 billion annually. This continues to be a hot and rapidly growing market with incredible opportunities for commercial operators, users and investors alike.