Wall Street is catching the cannabis bug.
In a lengthy note to clients on Wednesday, RBC Capital Markets estimates that legal sales of marijuana in the US are quickly catching up to beer and wine, and could be worth $47 billion within the next decade.
“In this US, the legal cannabis category is set to grow at a 17% CAGR over the next decade to as much as $47 billion in annual sales (this compares to the current diaper category at $4 billion in sales),” analyst Nik Modi wrote.
“Driving the growth is recreational use of the product, particularly concentrates and edibles. Estimates already suggest that the US category alone is $50 billion, which compares to spirits $58 billion, wine $65 billion, and beer $117 billion.” RBC’s $50 billion estimate includes both legal and illegal sales, and it’s not clear what the percentage is of each.
The investment bank also sang the praises of Constellation Brands‘ recent investment in Canopy Growth — the largest publicly traded marijuana company — as ahead of the curve. Constellation Brands is the $38 billion behemoth behind Corona, Modelo, Svedka, and more. [Read more at Business Insider]