The cannabis market has exploded over the past few years, with public companies now being listed on the stock market alongside timeless well-established businesses, dispensaries selling weed across a plethora of states and even CBD gummy bears being sold in almost every store.
Some have called it a hype-driven bubble, while others have labelled it as a long-awaited coming of age for the popular herb that has been taboo following Richard Nixon’s war on drugs in the 1970s.
However, regardless of opinion on whether it’s a bubble or not, recent figures have suggested that the budding sector is expected to experience an annual growth rate of 23.9% up until 2025, where it may well reach the dizzying heights of $66.3 billion in market worth.
The global prediction by Grand View Research is identifying massive growth due to a number of emerging factors such as growing interest in legalisation amongst numerous countries and the rise in cannabis use within the medical field.
Another new report by The Prohibition Partners predicts that the North American cannabis market alone could be worth more than $47.3 billion annually by 2024.
The flourishing growth within the US market will eclipse that of its neighbour Canada, despite the country becoming the first G7 nation to legalise cannabis use for adults and cannabis remaining federally illegal in the States.
Managing director at Prohibition Partners – Daragh Anglim – sets his sights even higher predicting that “although North America’s legal cannabis industry could be worth more than US$47.3 billion within the next five years, the true value of the market is likely to be much larger than current estimates”.
The booming industry includes everything from CBD products for an array of ailments and pains, medical grade marijuana prescribed straight from doctors, and simple weed joints for recreational use.
Currently, eleven out of fifty states have legalised cannabis for recreational use for adults over the age of 21 and 33 states have legalised medical cannabis, the US clearly knows what its citizens desire and require and is set to keep up with their demands for the foreseeable future.
The medical application of cannabis has increased monumentally after being supported in a multitude of scientific studies demonstrating the medical benefits in treating a variety of diseases.
As a result of this, medical cannabis now holds the largest market share of 70.3% in 2018 and is expected to expand at an annual growth rate of 24.1% from 2019 to 2025.
With the increasing burden of chronic pain and disease on both medical facilities and prescribed pharmaceuticals, alongside the need for more effective pain treatments, cannabis-based remedies are expected to amplify the demand for legal cannabis.
An increase in prevalence of cancer, Parkinson’s disease, Alzheimer’s disease, arthritis along with numerous other conditions will drive demand and see an increase in medicinal usage by professional bodies in future years.
The World Health Organisation shows that cancer is the second leading cause of death globally, accounting for approximately 9.6 million deaths in 2018. This demonstrates the necessity in broadening scientific discoveries and usage for medical benefits.
In 2017, Oxford University and Kingsley Capital Partners announced their partnership for the development of cannabinoid use in treating cancer and inflammatory diseases and is expected to have a positive impact on the medical cannabis market.
Additionally, with the need for more effective pain management alongside the growing opioid epidemic in the US as a result of over-prescription of opioid based pharmaceuticals, an increase in use of alternative medical cannabis that has proven to be potent as chronic pain management treatment will see global demand grow.
Decrease in the black market
Regulators will be glad to know that the legalisation and decriminalisation of cannabis has led to a significant decrease in the black market, as consumers turn to purchasing medical and recreational weed through legal means instead.
Through legalisation and eradication of the black market, many governments have been focusing on gaining the huge amount of tax revenues that are collected on the sale of cannabis products
In 2019, it was recorded that since the adult-use retail market of cannabis opened in November 2018, the State of Washington experienced the highest estimated tax revenue and collected around $319 million, closely followed by California where $300 million in tax was acquired.
In addition to tax collected to be redistributed within drug abuse programs, schools and medical research among other departments, more than 211,000 American citizens were able to support their families and communities through legal cannabis jobs.
There are now more legal cannabis industry workers than dental hygienists in the United States currently.
However, in countries where recreational cannabis has been legalised, there has been a ‘massive exodus’ of patients that previously obtained their supply through medical prescriptions then switching to purchase through recreational means.
This flood of patients moving away from prescriptions can be attributed to the easy availability and lower prices observed within recreational dispensaries along with the wide variety of strains.
Robin Beverett – 47-year-old disabled army veteran – ended up resorting back to a powerful prescription medicine for her anxiety as a result of rising medical cannabis prices after California began recreational sales, where an eighth of an ounce of cannabis flower cost $35 before, to now being charged almost $100.
Many medical cannabis card holders in the US only obtained them in the first place as it was the only way to use marijuana legally, therefore immediately after recreational use became legal they were then discarded.
Expanding product types
Cannabis products can be classified into buds, oils and tinctures, with the buds segment holding a significant amount of the market share with a value of 7.3 billion dollars and an expected expansion at an annual growth rate of 20.6% from 2019 to 2025.
Buds primarily being used to smoke as smoking cannabis can be applied to a variety of medicinal purposes and is more economical than edibles or tinctures with a more rapid onset.
The demand for cannabis oil however has seen significant growth due to stigma in regards to smoking, and to avoid harmful issues as a result of inhaling the plant.
The prevalence of CBD products within the cannabis market has also influenced users to switch to the oil version, as many states now allow the use of the low THC compound and doctors would feel more comfortable prescribing oil to their patients instead of smokable buds, thus the oil segment will experience further growth in the future.