BOULDER, Colo. — June 20, 2019 — The seventh edition in the series of the widely-cited “State of Legal Cannabis Markets” Reports, released today by Arcview Market Research and BDS Analytics, points to abundant growth and unrealized potential in the cannabis markets while underlining the challenges that face the sector. According to the report, 2018 showed a growth rate of 20 percent in the global sales of cannabis in regulated markets, with sales on track to surge 36 percent to $14.9 billion in 2019 and break $40 billion by 2024.
For the first time, the annual report covers the entire “Total Cannabinoid Market” (TCM) in the US, which includes medical and recreational cannabis sales in regulated dispensaries, plus sales of FDA-approved pharmaceuticals and hemp-based CBD products.
“In 2018, the FDA approved GW Pharmaceutical’s Epidiolex and passed the 2018 Farm Bill legalizing hemp in the United States,” said Troy Dayton, CEO of the Arcview Group. “These decisions being made at the federal level put pharmacies and general retailers in the business of selling CBD-based products in all 50 states, which substantially boosted the TCM. In the U.S. alone, sales of CBD products in all channels will hit $20 billion by 2024.”
While double-digit growth continues across the board and would be record-breaking in any other product category, 2018 was the slowest annual expansion the legal cannabis industry has seen since Colorado launched the adult-use era in 2014. California surprised the industry by becoming the first state to have its legal spending on cannabis fall, from $3 billion in 2017 to $2.5 billion, in the year in which it implemented an adult-use regulatory regime.
“California’s rocky start on full legalization was unprecedented,” said Tom Adams, Managing Director and Principal Analyst for BDS Analytics’ Industry Intelligence group and Editor-in-Chief for Arcview Market Research. “Analyzing the regulatory and tax reasons behind the decline allowed us to compare it to hugely successful roll-outs like Colorado’s in 2014 and develop a proprietary ‘Growth Indicator Matrix’. Scoring existing markets by that matrix led to what we think is a new level of accuracy in forecasting the future of new fully legal markets such as Massachusetts, Michigan and Illinois.”
The report provides the industry’s first current quantification and forecast out to 2024 of the TCM in the U.S. It also includes forecasts of the regulated medical and adult-use markets in each of the cannabis-legalizing countries of the world including, for the first time, province-by-province forecasts of the newly adult-legal Canadian market.
“A key takeaway from the report is that highly restrictive regulations and high tax rates are hurting the legal market’s ability to compete with the illicit market,” said Adams. “But legalization advocates endorsed our view that all fifty U.S. states can be expected to be medically legal by 2024, and that twenty will have adult-use sales.”
Other key trends analyzed in the State of the Legal Cannabis Markets, Seventh Edition, include:
- Total legal cannabis spending in regulated dispensaries in the U.S. topped $9.8 billion in 2018, and is forecast to grow to $30 billion in 2024, a compound annual growth rate (CAGR) of 20 percent.
- Investment capital raised by cannabis companies more than quadrupled to $14 billion in 2018, according to Viridian Capital Advisors.
- Despite a 55 percent decline in 2018 in New Cannabis Ventures’ Global Cannabis Stock Index, the five largest Canadian licensed producers closed out the first quarter of 2019 at a combined market capitalization of $48 billion.
- In Canada, which launched adult-use nationwide October 17, 2018, spending on adult-use cannabis is forecast to grow from $113 million in the partial year of 2018 to almost $4.8 billion by 2024.
- A total of 13 state markets will have passed the $1 billion mark in total annual legal cannabis spending by the end of 2024—by the end of 2018, only three had done so (California, Colorado and Washington).
- Internationally, more consumers are forecast to gain legal access to non-medical cannabis. In addition to Uruguay’s groundbreaking legal adult-use and Switzerland’s market for products with <1% THC, Luxembourg, Mexico and New Zealand have all given indications that adult-use sales could begin within the forecast period. Adult-use spending in international markets is expected to grow at a 33 percent compound annual growth rate from 2018 to 2024.
The 352-page report is available for $697, or as part of the annual Cannabis Intelligence Briefing subscription service from Arcview Market Research and BDS Analytics, priced at $1,975.
About Arcview Market Research:
Since 2011, Arcview Market Research has published over 20 reports analyzing and forecasting the rapidly evolving cannabis space. Arcview’s flagship annual report, The State of Legal Cannabis Markets has become the industry standard for market analysis and data in the sector. In 2017, Arcview Market Research partnered with BDS Analytics to add more robust point-of-sale data and consumer insights to its offerings. Arcview Market Research is a project of The Arcview Group. Founded in 2010, The Arcview Group is responsible for a number of groundbreaking ventures in the cannabis industry. The Arcview Investor Network includes more than 600 accredited investors who have put more than $260 million behind 200+ companies. In 2015 Arcview became a partner in CanopyBoulder, the first seed-stage mentor-driven business accelerator. Arcview is also co-founder of Cannasure Insurance Services, the leading provider of business insurance to the cannabis industry. Forbes Magazine recently named Arcview among the top 5 financial firms in the cannabis sector.
About BDS Analytics:
Headquartered in Boulder, Colo., BDS Analytics provides businesses with smart, actionable and accurate cannabis market intelligence and consumer research. The company provides a holistic understanding of the cannabis and CBD markets through insights distilled from dispensary point-of-sale systems through its market-leading GreenEdge™ Platform, producing comprehensive consumer research and generating cannabis industry financial projections and analyses led by BDS Analytics’ industry-leading team of thought leaders and analysts. To learn more about how you can utilize BDS Analytics’ superior market research, please visit www.bdsanalytics.com.
North 6th Agency (for BDS Analytics)