Despite recent challenges to the cannabis industry, there are high times ahead for projected worldwide cannabis sales. Optimism reigned in an updated market report by ArcView Market Research and BDS Analytics in January. Between Canada and several key U.S. states, the recreational marijuana market blew past sales expectations.
What prompted the updated release of “State of Legal Cannabis Markets”? Growth. And lots of it. Sales of legal cannabis skyrocketed. Analysts noted that 2018 had a growth rate of 17 percent, which soared in 2019, with sales jumping by nearly 46 percent. These numbers prompted analysts to update the 2024 global cannabis sales forecast.
So what’s on the forecasted horizon now? Let’s break the report’s analyst projections down:
- U.S. spending growth exploded in 2019 to $12.2 billion.
- Worldwide legal cannabis spending should reach $42.7 billion by 2024.
- The compound annual growth rate of worldwide legal cannabis spending is 26.9% from 2018.
- Sales in Illinois, Maryland, and Oklahoma in 2019 boosted overall national spending growth.
- A free-market approach is appealing to broader markets (like Oklahoma’s medical marijuana program) where licensing is concerned – think low tax rates and light regulation.
- Light regulation appears to be effective in out-performing the illicit market while creating a healthy tax revenue stream to the state.
- Legal, medical cannabis spending outside the U.S. and Canada at least doubled in 2019, thanks to markets in Germany and Mexico, from $367 million to $840 million.
California, Canada, and Cannabis
California and Canada are the global cannabis leaders, at least for now. The two most influential legal cannabis markets worldwide, despite challenges caused by overregulation and high taxation, are the proving ground for just how widespread cannabis consumption is among adults. Their growth continues to impact new markets coming online and sorting through the regulatory hurdles, all while their markets mature.
Canada remains a bright spot as a global leader in cannabis. Canada’s adult-use cannabis market launched on October 17, 2018, generating $129 million in adult-use sales over the year — this is in addition to the $453 million Canadians spent on medical marijuana over the same period.
Canada’s sales projections are going up due to several important factors: new retail locations and corrected supply shortages. In December 2019, Canada began offering expanded consumption options beyond flower and oil, which will also serve as a means of boosting sales.
Experts anticipate 2020 to be a big year for cannabis, but analysts are looking forward to the growth projections in 2022. “2022 is the year to watch as the pinnacle of growth, marked by the addition of major new U.S. adult-use markets, including New York and New Jersey,” the report’s authors wrote.
Right now, however, recreational cannabis is legal in 11 states plus the District of Columbia. Beyond 2022, smaller U.S. markets are expected to kick off medical marijuana programs in 2023 and 2024, with the surge in popularity and public policy, and social acceptance only expected to continue legalization across the country.