People in the US and Canada spent over $53 billion on marijuana in 2016

John
Locher/AP

People in North America spent $53.3 billion on legal, medical,
and illicit marijuana in 2016. That’s more cash than Americans
blow in a year at McDonald’s and Starbucks combined.

According to a new report from Arcview Market
Research, a leading publisher of marijuana market research,
the black market is losing ground to its legal counterpart
as consumers spend more money each year on legal cannabis.
Progress is slow, however.

The North American legal weed market posted $6.7 billion in
revenue in 2016, up 30% from the year before. The illicit market
generated 87% of total pot sales, down from 90% in 2015.

The numbers suggest the legal marijuana industry is growing
quickly, but it has a ways to go before it topples the black
market, which has the lion’s share of revenue.

2016 was a big year for weed. Seven US states
legalized cannabis in some form on Election Day. California, the
sixth-largest economy in the world, became the biggest domino to
fall with the passage of Proposition 64. Much of the West
Coast is now a legal enclave for recreational
pot.

Farm
workers remove stems and leaves from newly-harvested marijuana
plants in Avondale, Colorado.
Brennan
Linsley/AP

Troy Dayton, CEO of Arcview Market Research, credits
consumer spending on the black market with creating a runway for
growth in the legal market.

“The enormous amount of existing, if illicit, consumer spending
sets cannabis apart from most other major consumer-market
investment opportunities throughout history,” Dayton said in a
statement. Unlike other fast-growing markets, which include
organic foods, home video, and mobile, “the cannabis industry
doesn’t need to create demand for a new product or innovation —
it just needs to move demand for an already widely-popular
product into legal channels.”

In an interview with Business Insider earlier this month, Dayton
said the sudden popularity of alternative ingestion methods —
such as weed-laced topicals, sprays, and edibles — also fueled
growth in the legal market. Consumers who would never smoke a
joint are finding relief in other products, which offer a wide
array of tastes, strengths, and experiences.

Marijuana
edibles are one of the fastest growing categories in the legal
weed market, according to Arcview.
AP
Photo/David Zalubowski

In Colorado, where cannabis has been fully legal since 2012,
these alternatives grew from 30% of total legal sales in the
first quarter of 2014 to 45% in the third quarter of 2016.

“It’s one of the major reasons that people are going to leave the
underground market to go to the aboveground market. It’s about
variety,” Dayton told Business Insider. “You just can’t get these
products on the underground market.”

The so-called green rush
shows no sign of slowing down.

Arcview projects legal sales will grow at a compound annual
growth rate of 26% through 2021, when the North American market
is expected to reach $21.6 billion.

By comparison, McDonald’s generated $35.5 billion in sales in
2015. Starbucks saw $13.3 billion in revenue that year,
according
to trade publication QSR Magazine.