Legalization of cannabis is gaining traction worldwide due to high demand among consumers and a shift from medical to recreational cannabis in various countries. Investment and demand for more research and the development of safer applications and new delivery methods, such as inhalables, edibles, oils, concentrates, topicals, transdermals, is reinforcing market maturity. Canada, the U.S., Australia and a number of Europe countries are all moving towards legalization for recreational purposes and are expected to emerge as leading markets for sales.
The global legal marijuana market is expected to reach USD $146.4 billion by end of 2025 with a CAGR of 34.6%, according to a new report by Grand View Research, Inc.
The U.S. cannabis industry is projected to reach $50 billion by 2026, according to Cowen & Co., driven by the legalization of adult-use cannabis.
When California made adult-use cannabis fully legal in January 2018, the state immediately became the world’s largest legal cannabis market. California has a huge population with a deeply entrenched cannabis culture. and it is also the world’s fifth largest economy by GDP. The state attracts more than 270 million tourists each year, with Los Angeles reporting 48.3 million tourists in 2017.
California was the first to approve medical marijuana in 1996 – but medical cannabis is now legal in 30 more states plus the District of Columbia. Nine states, along with D.C., have now legalized cannabis for adult use. The word from the DEA is that there is now "discussion" about rescheduling CBD.
The Canadian cannabis industry is projected to reach C$22.6 billion over the coming years, according to Deloitte, driven by the legalization of recreational cannabis in October. TD Banks says that Canada’s GDP will get a boost after the legalization of marijuana adds $8 billion to the country’s economy.
Canada’s regulatory environment makes it the leader in the international cannabis export business. Licensed producers with proper certification are beginning to do business in Europe, South America, and Australia. While the U.S. largely drives consumer marketing trends, companies there cannot legally export products across state lines, much less internationally.
There is an even greater opportunity in Europe – an emerging €52.6 billion opportunity with few established players.
The European legal cannabis market is expected to exceed €115 billion by 2028, according to Prohibition Partners’ European Cannabis Report. With twice as many citizens as the U.S. and Canada combined, the the region has the potential to become the largest single market over the next five years if most countries legalize medical and/or recreational cannabis with programs similar to those in North America.
Currently, Germany is the largest cannabis market in Europe with a medical and recreational market that could total €14.7 billion – or about 26% of the continent’s cannabis market. There are also 10 other countries that have legalized medical marijuana and several others that could pass recreational laws over the next few years. These trends are quickly accelerating following Canada’s move to legalize recreational cannabis.
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