As more states continue to legalize recreational marijuana—the current tally is nine and Washington, D.C.–speculation is afoot among industry pundits that this could be the precursor to a major slowdown, if not death knell, for the medical marijuana industry, which has 30 states and D.C. allowing its use. According to estimates by leading cannabis researchers ArcView Market Research in partnership with BDS Analytics, the latest revenue projections for the U.S. medical cannabis industry in 2018 is $4.3 billion versus $6.7 billion for adult use. Last year, medical racked up $5.9 billion while adult use snagged $2.6 billion.

Much of the steep drop in the medical market and surge in recreational use has to do with users gaining wider access to the substance, says Tom Adams, managing director of industry intelligence at BDS Analytics. He also blames the dip on California, a state legendary for not effectively regulating medical cannabis, which it legalized back in 1996 (the first state in the U.S. to do so). Although the state was a $3 billion medical market in 2017, sales are estimated to sink to $293 million in 2018 due to adult use becoming legal, as of January 1. Now, users do not have wade through red tape to buy cannabis. They can go to any store and purchase the substance on their own. Plus, with significant tax breaks imposed on sales for medical patients, many stores have stopped selling medical marijuana, adds Adams.

Rachel Ramone Donlan (center) smokes a joint as Natalie de Leon (left) hands off her joint as she is arrested by Capitol Hill police during a rally to support the legalization of marijuana, Monday, April 24, 2017, on Capitol Hill in Washington. (AP Photo/Alex Brandon)

Does that presuppose that the medical cannabis business is doomed? Not quite. ArcView/BDS, estimates that for 2022, sales for adult use could skyrocket to $15.7 billion while medical might pull in $7.7 billion. Considering that figure is a $3.4 billion increase from the 2018 projection, the projection is not terrible; it’s not especially robust either, considering how many states have legal medical markets in contrast to those that have legalized adult use.

Industry experts are divided when it comes to forecasting the demise of the medical marijuana industry. Says Giadha Aguirre de Carcer, CEO of New Frontier Data, a cannabis researcher. “The idea that the legalization of recreational cannabis will kill the medical market is misguided and not fact-based.” She attributes her bullishness to the tremendous growth in the international market, “which have overshadowed investment levels in adult-use recreational markets.” Okay, that’s fine, but what about here in the U.S?

Dalton Edwards works with marijuana plants in a flowering room at Compassionate Cultivation, a licensed medical cannabis cultivator and dispensary, Thursday, Dec. 14, 2017, in Manchaca, Texas.  (AP Photo/Eric Gay)

Although New Frontier Data projects adult-use sales to surpass those of medical by 2025 in the U.S., the Washington, D.C.-based firm is predicting a double-digit compound annual growth rate for both the medical and adult-use markets—11% and 18% respectively. “The reality is that adult-use in the U.S. is enjoying its ‘honeymoon’ stage,” says de Carcer. “Over time, many of the same variables driving global growth of medical, which include rising quality standards, growth of CBD and increased research on efficacy, will likely create a resurgence in medical growth alongside a stabilizing adult-use market.

Some are not so convinced. Diane Czarkowski, founding partner of Canna Advisors, a Boulder, Colorado-based consulting firm that helps emerging businesses in the space, feels it’s inevitable that medical and adult/recreational use will merge into one system. “It is too burdensome for businesses–whether cultivation, processing, or dispensary–to maintain two separate business structures,” says Czarkowski, a veteran cannabis entrepreneur. “Also, as long as medical programs specify which conditions are recognized, there will always be patients who are excluded from access.”

With Epidolex, a non-synthetic cannabis drug recently approved by the U.S. Food and Drug Administration as a treatment for epilepsy and various CBD products flooding the market, the medical cannabis industry has lucrative potential, says Ryan Kocot, a cannabis lawyer/consultant from Sacramento, California. There’s a catch, though. “Even if we hypothetically put aside the countless legal hurdles companies face due to cannabis’s classification as a Schedule 1 drug, it’s much more expensive to bring a medicinal product to market when it comes to clinical testing and dealing with the FDA–not to mention patents.”

Employees inspect and sort marijuana buds for packaging at the Canopy Growth Corp. facility in Smith Falls, Ontario, Canada, on Tuesday, Dec. 19, 2017. (Chris Roussakis/Bloomberg)

Kocot sounds a counterintuitive note by suggesting the increased interest marijuana businesses are generating for larger companies as either investment opportunities or takeover targets could usher in the end of the medical market. To bolster his point, Kocot offers as evidence Corona brewer Constellation Brands’ recent jaw-dropping $4 billion-dollar investment in Canadian marijuana grower Canopy Growth. “Bigger companies getting involved translates into more lobbying dollars being spent on federal legalization,” he explains. “When federal legalization inevitably occurs, the question becomes: Will larger companies be interested in targeting the medicinal market? One may also argue that the medical market could be the next frontier for Big Pharma, particularly since federal law changing will open the intellectual property floodgates, with patents, for example. Reasonable minds could certainly disagree, but my guess is that the recreational market will be the main target of big business.”

Iris Dorbian is a New York City area-based business journalist who covers the legal cannabis sector. Follow her on Twitter or Instagram.

Article originally found at https://www.forbes.com/sites/irisdorbian/2018/09/11/why-the-adult-cannabis-market-could-kill-its-medical-counterpart/