Cannabis Market is projected to register a CAGR of 15. 4% during the forecast period (2022-2027). Like every other market, COVID-19 had an adverse impact on the cannabis market as well. The imposition of lockdown limited consumers from visiting brick-and-mortar shops.
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However, many cannabis companies began relying heavily on social media and e-commerce platforms to market to consumers during the year. Cannabis retail outlets, producers, manufacturers, distributors, and warehouses were deemed essential services by the Alberta Government on March 30, 2020. As a result, cannabis businesses and services continued to serve Albertans throughout the COVID-19 pandemic.
The proven medicinal properties of cannabis, legalization of cannabis, active research genetic development and modification of the plant, and advancements in intellectual property rights of cannabis are emerged to be the major drivers in the market. The market’s growth was fueled by the continued adoption of legal medical or recreational cannabis in more countries around the world, as well as high-profile achievements from some of the industry’s emerging top contenders. With the first cannabis-based drug receiving approval by the US Food and Drug Administration (FDA), massive amounts of investors are entering into legal marijuana operations.?
North America dominates the market and is projected to be the fastest growing market as well. The cannabis industry has been growing significantly in the United States due to its use for medicinal purposes. As a result, the National Cannabis Industry Association (NCIA) is promoting growth of the legal cannabis industry and providing it with favorable social, economic, and legal conditions in the United States. As a Psychoactive drug, cannabis continues to find extensive favor among recreational and medicinal users in the United States.
Key Market Trends
Increasing Legalization of Cannabis is Driving the Market
Medicinal cannabis accounts for a significant share of the cannabis market. Many countries, such as Australia, Canada, Chile, Colombia, Germany, Greece, Israel, Italy, the Netherlands, Peru, Poland, Portugal, Goa and Uruguay, have legalized the usage of cannabis for medicinal purposes. In March 2017, Germany legalized medicinal cannabis to supply cannabis products to the growing patient demand. In Germany, medical cannabis products are sold exclusively in pharmacies, and they are prescribed by doctors as a last resort medicine, which means the patient exhausted all other avenues of treatment. Further, the Croatian parliament allowed the cultivation and production of cannabis for medicinal purposes in the country in 2019.
As of July 2019, 11 states and Washington DC legalized the possession and personal use of marijuana for recreational purposes in the United States. On the other hand, 30 states in the United States legalized the usage of cannabis for medical purposes. More states are estimated to follow suit during the forecast period, considering the widespread demand for cannabis and its medicinal properties.
In the United States provinces, where cannabis has been legalized, consumers are mostly aged 50 years and above. Owing to the higher risk of chronic diseases post 50 years of age and the effectiveness of cannabis on such conditions, this demographic profile is expected to boost the demand for cannabis in the country. According to the US Government Accountability Office (under State Medical Marijuana Laws), symptoms and conditions that can be treated by cannabis include Alzheimer’s disease, anorexia, HIV-AIDS, glaucoma, cancer, arthritis, epilepsy, nausea, pain, cachexia, Crohn’s disease, migraines, multiple sclerosis, spasticity, and wasting syndrome. Continuous research and standardization of products for medicinal purposes are expected to increase the popularity and demand for cannabis in the future.
North America Dominates the Market
The North American cannabis market is set to become the major producer of cannabis, post the legalization of cannabis in Canada. In may, 2021, The U.S. government has approved new growers of research marijuana for the first time in more than 50 years, widening the capacity to study the drug’s medical value.
Similarly, some of its derivative compounds have been approved by the Food and Drug Administration for medicinal use. Marinol, Syndros, Cesamet, and Epidolex are cannabinoid drugs that received approval from the FDA. Furthermore, in the United States, ten states have legalized cannabis for recreational use, while 33 states and the District of Columbia have legalized cannabis for medical purposes. Among these states, California, Washington, and Colorado are the leading cannabis sellers. The production levels of cannabis in North America have increased rapidly over the past few years due to the expansion of the major players’ production capacities. More states are estimated to follow suit during the forecast period, considering the widespread demand for cannabis and its medicinal properties. ?
Further, the Statistics Canada data shows that compared to April-June 2019, people spent 74% more money on licensed cannabis during the same period in 2020 in the country, which is just after the World Health Organization declared a COVID-19 pandemic in March. This shows the increased consumption of cannabis and its related products in the country.
The global cannabis market is an extremely fragmented market with both local and regional players occupying significant market shares. In the cannabis market, companies are very active and are involved continuously in acquiring shares and developing new products to attract more consumers toward their products.
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