Legal Marijuana Market Seen to Reach $93 Billion by 2030
Though it may seem like the pandemic is slowing down a number of businesses this year, there’s no stopping the global legal cannabis market.
A new report from Grand View Research reveals that the legal cannabis market worldwide is seen to reach a whopping $93 billion, with a compound annual growth rate (CAGR) of 18.1% during the forecast time. Experts predict that cannabis legalization will only continue to spread, especially adult-use cannabis.
The report states that medical cannabis makes up the biggest part of the market segment, taking up most of the revenue shares based on 2019 figures at 71%. This is attributed to the increasing adoption of cannabis as a legitimate alternative to pharmaceuticals, especially for treating life-threatening conditions including cancer, Parkinson’s disease, Alzheimer’s disease, arthritis, and neurological disorders among others. There is also a rising demand for effective painkillers as well as chronic pain medications for the elderly, and this is where much product demand is expected to be seen.
When it comes to market share based on product type, they foresee that cannabis buds will still make up most of the share. Cannabis buds don’t require any processing since they are primary plant products, which make them a more affordable option especially for patients who don’t have much income. Additionally, smoking cannabis buds provides a quicker onset making them ideal for patients who require fast-acting medication, which will help boost its growth in the market.
Based on 2019 figures, chronic pain accounted for most of the legal cannabis market because of the sheer volume of patients. However, mental health disorders are expected to see a rise in demand during the forecast period because of the number of patients who are suffering from these disorders, such as depression, anxiety, and Alzheimer’s.
In terms of geographical makeup, North America still has the biggest revenue share, accounting for 88.4% in 2019. This is due to the spreading legalization of medical cannabis as well as government regulations relaxing their standards. Additionally, legal cannabis in Canada, Israel, as well as some nations in South America and Europe fuel the growth even more.
Post-COVID Global Cannabis Report for 2020-2026
Another report by Data Bridge Market Research reveals that the global cannabis market is expected to see a CAGR of 34.7% from 2019 to 2026. They credit the growth to the rise of medical cannabis legalization in several regions throughout the world including North America, Europe, and Asia-Pacific. This has resulted in cannabis manufacturers seeing a massive demand for products, while boosting the development of different product categories not limited to cannabis, but cannabis-infused goods as well.
They also mention the growth of cannabis as a recreational drug, particularly in regions where it was once illegal and are now seeing heavy demands for it. In the past, consumers in these regions had to get their cannabis through risky means but this also meant that they were not assured of a quality product. Being able to provide cannabis through legitimate and safer channels has resulted in positive revenue outcomes.
Role of Asia-Pacific Market
When talking about the growth of the global legal cannabis market, one cannot underestimate the role of the Asia-Pacific market. Once synonymous with harsh drug laws, some countries in Asia are now catching up to the rest of the western world when it comes to liberal drug laws.
A new report called the Asia Pacific Cannabis Market Forecast to 2027 by Reportlinker.com reveals the significance of this market in pushing the global marijuana market to greater heights. Southeast Asian countries have experienced liberalization of cannabis use in the recent years, which is a surprising yet positive outcome, spurring the progress of research in places like South Korea as well as New Zealand and Australia. Canopy Growth, a major player in the cannabis market, has already shown interest in working with local players such as Thailand and South Korea.
Thailand has also emerged as a major producer of cannabis, especially after 2018 when it proved itself to be a major hub for medical cannabis. It also helped that the government was supportive of liberalization efforts, even creating the Medical Cannabis Compassionate Center to spur development of their very own legal cannabis industry.
Then in March 2019, Epidiolex was approved in Japan for clinical trials.
The occurrence of the pandemic is also seen to increase the demand for cannabis because of the numerous studies proving how it can treat COVID-19 symptoms.
When it comes to compounds, THC-dominant products have been seen to be the most lucrative in Asia-Pacific, though CBD-dominant products are expected to witness even more growth.
What This Means For Investors
No matter what happens to the global landscape, we’re always going to find a use for cannabis and the pandemic proves that. The industry will only continue to change and evolve though it will still be largely dependent on the laws surrounding its use as nations and states in the US will still have varying approaches on its use, legality, distribution among others.
For investors, this means that there will be much more volatility in the global cannabis market because of the changes expected in addiction businesses such as alcohol and tobacco. These, and other companies that want a piece of the pot pie. In the United States at least, the market remains complicated because cannabis is still illegal federally but this hasn’t stopped states from allowing cannabis companies to operate because of local laws.
Investors can benefit from looking into setting up shop in countries that have regulated it for recreational use such as Canada, and observe how companies break away into the United States. We also see more new products available in the market by next year onwards, most especially in the CBD and hemp-based products.
(Rest in peace, Alex, and thank you for making learning fun for a whole generation!)