The New “Smoke Break”
Cannabis tourism has risen to a $17 billion industry. And it’s just getting started.
While this trend has flown under the radar, its growing popularity shouldn’t come as a surprise. The new wave of cannabis-focused travel coincides with a new wave of cannabis-friendly legalization.
Last year alone, legislation was introduced in 31 US states to legalize recreational marijuana use.
“We’re seeing an unprecedented number of legalization bills being filed across the country,” Tom Angell of Marijuana Moment recently told the NY Times. “And more and more of them are actually being prioritized by legislative leaders and signed into law by governors who are up for re-election.”
That policy shift also reflects a shift in public opinion. Recreational marijuana no longer carries the stigma it once did. In fact, a Harris Poll conducted in May found that more than two-thirds (68%) of American adults now support adult use.
The travel trend itself has also gone a long way to change the perceived demographics of those who smoke marijuana. According to the Cannabis Travel Association International, cannabis-motivated travelers are equally male and female, have a college degree (59%), a job (82%), and an average household income of $87,000. They have disposable incomes and are ready to spend on “canna-cations” — everything from marijuana farm tours, to “bud and breakfast” style hotels, to marijuana-focused activities — like the multi-city “Puff, pass, paint” art classes.
States that have begun to accommodate that appetite are already seeing the economic benefits and making a strong case for others to follow suit.
A financial study released in 2019 estimated that Florida (which currently leads the country in medical marijuana with $1 billion annually) could accrue an additional $190 million in tax by embracing recreational sales, and corresponding tourism.
Colorado, where recreational use has been legal for a decade, brought in $423 million in taxes from the cannabis industry last year.
And that revenue only increases when you begin to take into account the indirect dollars cannabis tourism brings in. Whitney, founder and chief economist at Whitney Economics, calls this the “multiplier effect.” He estimates that for every dollar earned in cannabis retail, an additional $2.80 is injected into the local economy.
Forbes took a look back at 2021 and projected that cannabis sales contributed roughly $12.6 billion to restaurants, hotels, attractions, and other shops — as well as state and municipality tax coffers.
And these numbers are only projected to grow. Forbes reports the cannabis industry is expected to be worth $90 billion by 2026. Many millennials, who will make up 50% of US travelers by that year are on board. When polled, half agreed access to legal recreational cannabis was important when choosing a vacation destination.
To legalize or not to legalize–that is the question for states. However, we can say with certainty that the ones who have been early to embrace green, are making plenty of it.
Danilo Diazgranados is an independent investor in the global food and wine, financial services, real estate, and the hospitality sectors.