The cannabis market is projected to reach USD 90.4 billion by 2026, recording a CAGR of 28.0%, in terms of value. It is witnessing significant growth due to increasing legalization of cannabis across various regions. Also, the growth of this market can also be attributed to the increasing awareness among consumers regarding health benefits of cannabis and its growing medical application. The North America region is going to dominate the global cannabis market due to increasing legalization for both medical and recreational purposes all over North America.
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Drivers: increase in legalization of cannabis and rise in social acceptance of marijuana
Cannabis legalization is often viewed upon with dual perceptions wherein its legalization has been proven to be met with skepticism associated with possible abuse. Legalization of cannabis has allowed people to practice safe substance usage along with realizing its medicinal benefits. As a result of which, many countries are gradually legalizing the usage of cannabis across the globe. While most the countries across the globe have still not legalized the recreational use of cannabis, the approach to the usage and sales has been relaxed over the years. This has led to the growing popularity of usage of cannabis in various regions driving the growth of overall cannabis market.
Restraints: Complex regulatory structure for the usage of cannabis
One of the major factors restraining the growth of market is complex regulatory structure for the usage of cannabis. Companies offering cannabis and cannabis-infused products are required to comply with different regulatory guidelines, globally. The strict regulatory norms related to the production and sales of cannabis across different countries could be tedious for manufacturers and stakeholders to comply. Also, the regulations pertaining to the usage of cannabis is varied from country to country, it creates further hindrances in the growth of global market.
Opportunities: Emergence of cannabis legalization in Asia Pacific
As most countries in North America, Europe and South America are legalizing cannabis, there is a huge opportunity for the initialization and legalization of cannabis in the Asia Pacific region. China, being one of the major markets for industrial hemp, is expected to become one of major upcoming markets for industrial cannabis. Many key players operating in the cannabis industry, are waiting for the legislative development in the Asia Pacific region, expecting to generate huge opportunity for cannabis. Several countries in the region could be potential low-cost producers of cannabis with high production capacity.
Challenges: Myths associated with cannabis
Although, thousands of patients in North America and Europe believe that cannabis is an effective medicine for treating various chronic diseases. There is a myth regarding the intoxicating effects of cannabis irrespective of THC content. There is a lack of acceptance of cannabis as a medical therapeutic because of there is an assumption that cannabis is to be consumed only via smoking. Whereas, cannabis can be consumed through pills, vaporization, edibles, dabs, and patches. To overcome these challenges, effective marketing strategies are needed for the right placement of cannabis-based medical products.
Key Market Players:
Canopy Growth Corporation (Canada), Aurora Cannabis Inc. (Canada), MedMen (US), Terra Tech Corp. (US), Aphria Inc. (Canada), VIVO Cannabis Inc. (Canada), The Cronos Group (Canada), Medical Marijuana Inc. (US), STENOCARE (Denmark), Tikun Olam (Israel), Organigram Holdings Inc. (Canada), Cresco Labs (US), Indiva (Canada), Curaleaf Holding Inc. (US), HEXO Corp. (Canada), Ecofibre Limited (Australia), Harvest Health & Recreation (US), Green Thumb Industries (US), Maricann Group Inc. (Canada), and TerrAscend (Canada).
By product type, the concentrates segment is projected to grow with the highest CAGR in the cannabis market during the forecast period
Based on product type, concentrates is the fastest-growing segment in the market. The growth of this segment is majorly attributed to its ease in usage and its versatility in the method of delivery. These concentrates are offered in the form of dabbing, ingestible oils, and tinctures. They also offer cleaner and smoother hits than the flower.
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By compound, THC-dominant segment is projected to grow with the highest CAGR in the global market during the forecast period
Based on compound, THC-dominant segment will be the fastest-growing segment in the market. The growth of this segment can be associated with the medical benefits offered by THC-dominant products. These are considered to be very effective in relieving nausea, appetite loss, and insomnia.
By application, recreational segment is projected to account for the largest share in the global market during the forecast period
By application, the market is segmented into medical and recreational. Recreational segment dominated the market owing to the high demand and consumption of cannabis for recreational purposes. Thus, the legalization of recreational applications has huge potential to translate into a large market.