How in the World Will People Consume $57 Billion Worth of Legal Cannabis? Every Which Way They Can Imagine!
Cannabis sales in North America are growing faster than any fairy tale beanstalk, and with full legalization poised for July of this year in Canada, the continent is by far the most fertile ground in the world for commercial cannabis abundance.
But only five percent of the world’s 7.6 billion people live in the cannabis-friendly nations of Canada and the United States. That leaves a lot of potential growth for cannabis markets overseas, where sales are expected to soar as legalization spreads, according to our recently published The Roadmap to a $57 Billion Worldwide Market.
But sales of what? Pro tip: We probably won’t see worldwide expansion of cannabis gummies anytime soon.
Different forms of cannabis consumption have long been popular around the world: witness the relative popularity of flower versus hashish in North America and Europe, respectively. But now legalization is sparking a product-development frenzy around cannabis, and the types of consumables are proliferating.
In three short years, for example, the percentage of sales represented by flower plummeted in Colorado from 70 percent to below 50 percent between the beginning of adult-use sales in 2014 and 2017. As a category, concentrates have seen the most growth in terms of dollar sales, and product-development in that world is dynamic, with concentrates like shatter, wax, live resin and caviar entering the market and beguiling consumers.
But the product diversity winner goes to edibles, where brands offer everything from cold-press coffee in cans to chocolate-covered almonds to gum, mints, tea, snickerdoodle cookies and much more.
We know that candy is No. 1 in the United States — the land of Halloween and zillions of miles of store candy aisles. In cannabis dispensaries in California, Colorado, Washington and Oregon, according to our GreenEdge™ Retail Sales Tracking Platform of 2017 sales, candy captured 40 percent of the $669.16 million edibles market, handily beating its nearest competitor chocolate (at 21 percent) and ranked far above the rest of the edibles categories, including beverages, tinctures, baked goods, and more.
But variations in taste are significant between states. Witness the love for infused foods in California, where things like brownies, chocolate chip cookies and slices of baklava captured 15 percent of the edibles market during 2017. Coloradans, on the other hand, are lukewarm about infused foods — sales represent just 8 percent of the edibles marketplace. Instead, they are nuts for candy, sales of which represent 49 percent of all edibles sales (and Coloradans love those gummies — sales of gummies captured 70 percent of the candy market). In California last year, on the other hand, candy reached 33 percent. And while they dig gummies — 57 percent of candy sales went to gummies — their gummy love isn’t at a Colorado level.
Edibles sales trends worldwide are unlikely to mirror those in the United States in the short-term, largely due to regulatory considerations. Germany, for example, launched medical-cannabis sales in early 2017, but it is only sold in pharmacies, largely as dried flower — those same meticulous, white-coated German pharmacists accustomed to spending their days packaging sterile, odorless pills now also stuff sticky chronic into bottles.
Meanwhile, most markets in Europe, such as France and the United Kingdom, are strictly limited. Cannabis in these markets normally is offered only in pill form.
Our research projects that Germany soon will be the No. 3 nation in legal cannabis consumption, and in the long term that market could support a dynamic chocolate market, given its people’s love of all products made from the cacao plant. Germany is No. 2 in the world for per capita chocolate consumption, with the average German eating 17.4 pounds of chocolate a year (Switzerland, which also has relatively liberal cannabis laws, is No. 1). The United States, meanwhile, lags in 9th place, with per capita chocolate consumption at 9.5 pounds a year. Seriously – that’s a LOT of chocolate.
But for German market to truly turn sweet, Germans first will have to allow THC-infused chocolate.
It is laws, not consumer demand, that so far have held-back worldwide expansion of commercial cannabis sales, and hence development of new consumption forms. But laws are evolving rapidly, and patients are increasingly gaining fresh access to cannabis products to manage stress, anxiety, pain and more. North America led the world in terms of regulatory reform for 20 years, and now is leading it in the development of new cannabis-based consumption options. But eventually, the rest of the world is going to catch up, both in terms of legalizing cannabis consumption and developing new forms of it.
The Roadmap to a $57 Billion Worldwide Market report was co-produced by Arcview Market Research and BDS Analytics.
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