Consumer spending on legal cannabis worldwide reached $10.9 billion in 2018. This number is especially significant considering the variables at play: the California market transition from lightly regulated medical-only to fully regulated adult-use; the maturation of first-in, adult-use markets in Colorado and Washington; and the lackluster rollout of legal adult-use cannabis in Canada. As legalization continues to spread, the global market is expected to grow at a compound annual growth rate (CAGR) of 24% between the end of 2018 and 2024, reaching $40.6 billion. So yes, the worldwide cannabis market will hit a staggering $40+ billion within 5 years.
The cannabis market, however, is about far more than just the legal cannabis and derivative products sold through the regulated dispensary channel. The compound makeup of cannabis — cannabinoids, like Cannabidiol (CBD) — have broad applicability. What is now referred to as the “Total Cannabinoid Market” (TCM) includes cannabis products sold in the dispensary channel as well as prescription cannabis pharmaceuticals and a multitude of products containing CBD and other non-psychoactive cannabinoids sold through the general retail channel.
In the U.S. alone, BDS Analytics predicts the TCM will reach $44.8 billion in 2024, with the largest percentage of that anticipated spend in regulated cannabis dispensaries across all 50 states, Washington, D.C., and four U.S. territories.
Another contributing factor of the projected $44.8 billion is the expected sales spike in hemp-derived CBD products across general retail. The market has already seen significant growth since the first of several ongoing hearings and approvals from the U.S. Food and Drug Administration (FDA) regarding CBD on May 31. The FDA approval of GW Pharmaceuticals’ Epidiolex (a naturally derived CBD-based drug treating epilepsy) has further contributed to the rise of CBD sales and overall interest among consumers and non-consumers alike.
Detailed forecasts for the worldwide legal cannabis markets and U.S. TCM are presented in The State of Legal Cannabis Markets, 7th Edition, published June 20, 2019 by Arcview Market Research and BDS Analytics. Some other key findings from the publication include*:
- Total legal cannabis spending in regulated dispensaries in the U.S. topped $9.8 billion in 2018 and is projected to grow to $30 billion in 2024, a CAGR of 20%.
- A total of 13 state markets will pass the $1 billion mark in total annual legal cannabis spending by the end of 2024.
- Canadian spending on adult-use cannabis is expected to grow from just under $113 million in the partial year of reported sales in 2018 to $4.8 billion in 2024. Medical cannabis will decline as the market shifts to adult-use access without the requirement of medical registration, sales falling from nearly $457 million in 2018 to just over $381 million in 2024.
- Growth in markets beyond North America is characterized by expanding access both through liberalization of existing medical markets and legalization of medical cannabis in new markets. Global growth in legal cannabis spending is accelerating, forecasted to swell from $517 million in 2018 to $5.4 billion in 2024.
- Money is flowing ever more freely into the cannabis industry. Investment capital raised by cannabis companies quadrupled to $14 billion in 2018, according to Viridian Capital Advisers. The five largest Canadian licensed producers—Canopy Growth, Tilray, Aurora, Cronos and Aphria—closed out the first quarter of 2019 at a combined market capitalization of $48 billion.
Click to view and download The State of Legal Cannabis Markets, 7th Edition infographic
*BDS Anaytics’ GreenEdge™ Platform is the source for U.S. legal cannabis retail data