What’d we tell you? Last week we discussed how significant a move Constellation’s $3.8 billion investment in Canopy Growth was. A week later? RBC Capital Markets is telling investors that the US legal sales alone projects to a $47 billion cannabis valuation within a decade, Business Insider reports.

In a long note to investors, that our own founder, Aaron Lachant, described as the “most optimistic cannabis valuation,” RBC analyst Nik Modi explained: “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)” And what’s anticipated to fuel the compound annual growth rate? [Scrooge McDuck voice] “Bless me bagpipes! It’s our old friend, edibles!”

RBC then went on to laud the Constellation move –for the record, we do too, duh.– with Modi stating: “We think this is exactly the type of move that more companies should be making (not in cannabis necessarily, but having the foresight to invest in future revenue streams, especially at a time when the core business is performing).”

The reason behind RBC’s optimism, and that of many others? Two reasons.

1.  The shifting demand of cannabis away from plant flower and towards extracts and rendered products such as edibles, beverages, and oils. As we have touched on in the past, flower is a commodity with prices and stocks far more prone to the whims of the market, supply and demand, et cetera. Rendered products and extracts, on the other hand, are shelf stable and less prone to fluctuations and volatilities of a market. This shift in consumer habits is right up the alley of big players such as Canopy Growth and, say, massive multi-national brewing companies with the operations and distribution infrastructure to deliver a THC non-beer in bulk to suppliers.
2. The other big reason behind RBC’s optimism is the good ol’ court of public opinion. A whopping 83% of Americans believe that cannabis should be legalized at some level. With pressure mounting from both sides of the political aisle, from big business, and now from Wall Street, how much longer can cannabis remain illegal on the federal level? A lot less than 10 years according to RBC.

Constellation’s transformative investment last week, and BOA/Merrill Lynch’s role in it, marked the US banking sector’s first truly bold foray into the plant-touching business, but it won’t be the last. RBC’s investor note practically guarantees it.

However, the implied caveat amongst all this big news, is that cannabis remains illegal on the federal level. While Constellation, Canopy Growth, et al all see a bright and global future for the industry, the United States will continue to sag further and further behind until cannabis is de-scheduled on the federal level.