If there were a theme song for cannabis sales growth in the United States in 2023 and beyond, it wouldn’t be California Dreamin’. It would be New York State of Mind.

The West Coast, with its socially tolerant mores, has historically dominated marijuana legalization efforts and the national conversation about pot. That dynamic is changing.

As I explain below, New York State is on track to be the top contributor to marijuana sales growth from now until 2027, followed by Florida and New Jersey. California comes in fourth. This trend is underscored by the massive influx lately of investment dollars into marijuana companies based on the Eastern Seaboard.

New data from research firm BDSA estimates that global legal cannabis sales totaled about $32 billion in 2022, and forecasts they’ll grow by more than 15% to nearly $37 billion in 2023. U.S. legal sales were estimated at $26 billion in 2022, and they’re on track to grow by more than 14% to at least $30 billion in 2023.

The Canadian cannabis market, which racked up $4.2 billion in legal sales in 2022, is forecast to grow 12% to $4.7 billion in legal sales by 2023.

The U.S. remains the growth driver…

The greatest impetus behind global cannabis sales growth so far has been the U.S. adult-use (i.e., recreational) channel. Over the next few years, international markets are poised to exert a greater influence, but U.S. markets will still account for the majority of legal cannabis sales globally to 2027.

BDSA forecasts that U.S. legal sales (both for recreation and medicine) will continue to expand and account for $45 billion of the $60 billion total for global legal sales expected by 2027. Within this 2027 U.S. sales total, $35 billion is forecast to derive from recreational sales, with new markets in the Northeast and Midwest expected to be top drivers of adult-use sales growth over the next five years.

WATCH THIS VIDEO: What’s The Buzz for Cannabis in 2023?

New York and New Jersey alone are expected to bring in a combined $4.8 billion in sales growth between 2022 and 2027.

Although New York has struggled with bureaucratic delays in the launch of recreational sales and continues to grapple with a burgeoning level of illicit sales, legal sales in that state are still expected to total $1.3 billion in 2023, and to grow to $2.7 billion by 2027.

Governor Kathy Hochul’s (D) latest budget plan projects that over the next six years, the Empire State will generate more than $1.25 billion in legal marijuana tax revenue.

New Jersey, which saw legal sales total $593 million in 2022, is forecast to reach billion-dollar-status in 2023, with sales growing to $2.8 billion by 2027.

Midwest markets are also positioned to become major contributors to total sales growth. Ohio, Missouri, Illinois, and Michigan are expected to contribute $3.4 billion in sales growth between 2022 and 2027 (see chart).

From my perspective, the interesting phenomenon is the emergence of states such as New York and New Jersey as cannabis powerhouses. The marijuana legalization wave started in California in the late 1990s, and until recently the state was the leader in cannabis sales growth.

However, states along the East Coast are emerging as competitors and major sources of cannabis sales as well as business activity.

Cannabis in New York has been legal for medical purposes since 2016, and recreational purposes since 2021. That same year, medical and recreational marijuana became legal in neighboring New Jersey. The Garden State is getting greener…with weed.

Marijuana is becoming more pervasive and socially accepted. According to a recent YouGov poll, the percentage of U.S. adults who say they have tried marijuana sits at 52%, the highest level measured to date. And yet, marijuana remains banned in the U.S. at the federal level, which means the industry still has enormous room for future growth. When the ban eventually gets lifted, sales (and share prices) will take off like a rocket.

After a sluggish 2022 for marijuana companies, we’re now on the cusp of a “break out” year for marijuana and the ancillary industry of psychedelics. That’s why I’ve launched an investment service called Marijuana Profit Alert.

My publication provides specific, actionable advice on the best investments in the psychotropic revolution. In my portfolio of holdings, I strive to strike the right balance between risk and reward. Click here to learn more.

John Persinos is the editorial director of Investing Daily.

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