A new marijuana market research report projects a worldwide industry boom on the assumption that legalization will continue to expand.
Worldwide sales of cannabis are expected to total nearly $15 billion in 2019 before reaching $44.8 billion by 2024, according to a recently-released report by Arcview Market Research and BDS Analytics.
The seventh edition of their “State of Legal Cannabis Markets” report evaluates the “Total Cannabinoid Market” and includes sales of marijuana and CBD products.
In the United States, total legal cannabis spending is forecast to grow at a compound annual growth rate (CAGR) of 20 percent to hit $30 billion in 2024, up from $9.8 billion in 2018. The estimates were made under the assumption that recreational marijuana legalization will continue expanding further across the country, including Arizona, Maryland, New Jersey, New Mexico, and New York, which will in part help the industry triple in size.
The growth of the U.S. cannabis market, according to the market research firms, relies on the eventual passage of the STATES Act, a bipartisan bill that would allow state-legal marijuana markets to function without federal interference. It would also need the boost for the approval of the SAFE Banking Act, which would allow banks to do business with marijuana-based companies.
In addition, the report projects that the introduction of new products to the market, such as edibles and vape pens will offer more consumer choices and subsequently generate new sales from dispensaries, retail stores, and pharmacies.
Marijuana Going Global
With cannabis’ natural benefits becoming more widely known across the world, usage is growing on a wide scale. Even women and seniors, once more hesitant to engage in cannabis, are increasingly embracing it for health.
While the U.S. leads the world in marijuana market size, the global cannabis market is expected to also be bolstered by new and young cannabis industries taking hold in other countries. Spending on adult use cannabis in international markets is expected to grow at a 33 percent CAGR from 2018 to 2024.
“Countries are realizing that people are using cannabis anyways. They can either tax it and regulate it or they can do nothing,” said report co-author Tom Adams, the managing director of industry intelligence at BDS Analytics. “That realization is set to spread globally and won’t take that long to see cannabis prohibition unravel.”
Full marijuana legalization in Canada last year is also immensely boosting the worldwide cannabis market, with the province of Ontario leading in sales, followed by Alberta, British Columbia, and Quebec. The country’s adult use marijuana sales are projected to grow from $113 million in the partial year of 2018 to nearly $4.8 billion by 2024.
The report’s projections were also calculated under the assumption that full legalization will occur in Mexico, New Zealand, and Luxenburg in the next few years. Such plans are already in the works and the arrival of major reform is expected to only be a matter of time. Also, the recently legalized markets in South Korea and Thailand will likely boom, contributing to further grow in the market in Asia.
In Africa, South Africa, Zimbabwe, and Lesotho are also planning on legalizing marijuana in the coming years.
Arcview Market Research and BDS Analytics beliieve that as the global marijuana industry grows, larger companies will increasingly want to invest in marijuana. Last year, Constellation Brands, a Fortune 500 company and international producer of alcohol, invested a huge sum in the Canadian-based cannabis company. Tobacco giant Altria Group invested $2.4 billion in Canada cannabis company Cronos.
Moving forward, corporations that already have footholds in agriculture, commercial product production, and retail will have the advantage when getting in.
When the global marijuana market matures, the industry is expected to consolidate with larger companies buying up smaller ones, for better or worse.
More About the Cannabis Market
A market research report produced recently by New Frontier Data estimated the value of the global cannabis market at $344 billion, with 263 million people worldwide using cannabis at least once per year.