Cannabis Market Size, Share, Growth & Industry Trends [2031]

Report Description

Cannabis Market Outlook

The global cannabis market size was valued at USD 11,683.3 Million in 2019 and is projected to reach USD 52,995.4 Million by 2027, expanding at a CAGR of 22.2% during the forecast period. Cannabis refers to a group of three plants, cannabis sativa, cannabis indicia, and cannabis ruderalis. These plants have psychoactive properties, and thus finds a wide range of applications.

Major psychoactive constituent in cannabis is tetrahydrocannabinol (THC). Compounds which are structurally similar to THC are referred to as cannabinoids. The market is driven by factors such as increasing cannabis legalization in multiple countries, increasing awareness among consumers for medical use of cannabis, government focus on revenue generation through cannabis, and rising investment in research & development of cannabis compounds.

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Cannabis Market Dynamics

Drivers

Cannabis Commercialization Boosting Cannabis Sales

Increasing commercialization of cannabis in various forms, including CBD, is propelling the growth of cannabis market. In 2018, after passing of Farm Bill in the US, hemp-derived CBD products were legalized. Initially, many companies did no partake in the cannabis market due to legal concerns; however, after the passage of the bill, large corporations have begun to commercializing and advertising CBD products, which in turn, has significantly increased the sales of cannabis.

Moreover, with entrance of new players is expected to create growth opportunities in the near future. The legalization of cannabis has become a significant source of income for various states in the U.S. Furthermore, increasing cannabis legalization in various countries is projected to fuel market growth during the forecast period.

E-commerce Availability of Cannabis Products is Fueling Market Growth

Presently, many consumers prefer purchasing products online, due to the availability of offers and a wide variety of products. The sale of cannabis through e-commerce is becoming a viable option for market players, as more consumers are using cannabis products. Over the past decades, the cannabis market has witnessed multiple legal barriers that have restraints its expansion into the digital marketplace.

However, various industries have become entered into partnerships with online companies to sell cannabis products, as more countries continue to legalize it. Various e-commerce players such as Amazon.com, Inc., Alibaba Group Holding Limited, and Walmart Inc. have started selling cannabis products through their websites, thus, propelling the growth of the cannabis market.

Restraints

Regulations and the Black Market

One of the biggest challenges in cannabis retailing is the regulatory framework, which restrict the number of licensed retail holders. In spite of being fully legalized country for cannabis, Canada have only two provinces where a licensed retail holder is allowed to practice e-Commerce. Regulations in Canada curtail marketing by banning distinctive packaging and celebrity endorsements, which makes it difficult for cannabis companies to build their brands and gain consumers.

While legal cannabis is heavily regulated, the black market is not held up to the same level of scrutiny. Multiple black-market dispensaries are fully operational in Canada. The lack of law enforcement against black market dispensaries gives black market players the freedom to sell unsafe products while taking business away from legal cannabis companies.

Opportunities

Satisfactory Customer Service Registering for Legal Cannabis Companies

Legal cannabis companies are expected to edge out the black market through superior customer services. Availability of numerous strains of in the market, make it difficult for consumers to know how differentiate them. Customers who purchase through the black market are stuck with what their dealers provide, while legal cannabis companies are employing cutting-edge technology to educate and retain consumers.

For example, cannabis retailers are employing artificial intelligence (AI) through apps such as Uppy, where medical cannabis consumers can journal the effects of different cannabis strains on their body. Based on consumer data, AI technology is able to provide consumers with personalized recommendations about which cannabis strains could work best for them. Thus, companies are expected to create lucrative opportunities through better customer services and technological advancement during the forecast period.

Cannabis Market Segment Insights

On the basis of product type, the global cannabis market is bifurcated into edible oils, tincture, capsules, creams, CBD extracts/paste, dry herb, and others. The CBD extract/paste segment accounted for xx% share of the market in 2019.

Increasing medical and industrial use of CBD extract/paste supports significant growth of this segment. The dry herb segment is estimated to hold 15.5% share of the market in 2020 owing to the Increasing awareness regarding health benefits of cannabis consumption among consumers.

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In terms of compounds, the cannabis market is classified as tetrahydrocannabinol (THC)-dominant, cannabidiol (CBD)-dominant, and balanced THC & CBD. The balanced THC & CBD segment is anticipated to expand at a significant CAGR of 23.1% during the forecast period due to increasing R&D for the medical use of balanced THC & CBD.

Based on applications, the cannabis market is segregated into pain management, neurological health management, mental health management, and recreational. The mental health management segment is anticipated to expand at a significant CAGR of 22.2% during the forecast period. Increasing research & development on cannabis use for reducing stress and anxiety among consumers is expect to register growth opportunities for the mental health application segment.

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In terms of legality, the cannabis market is bifurcated as legal and illegal. The legal segment is anticipated to expand at a significant CAGR of 22.4% during the forecast period, as governments of various countries are extensively focusing on stopping the operation of illegal cannabis sales and implementing new laws on the legal sales of cannabis.

Regional Analysis

In terms of regions, the market is fragmented into North America, Europe, Asia Pacific, Latin America, and Middle East & Africa. North America is a promising region for the market. The region constituted 52.5% share of the market in 2019.

The market in the region is projected to expand at a significant CAGR of 22.0% during the forecast period due increasing use of cannabis in medical application in the region. The market in Asia Pacific is projected to expand at a CAGR of 24.2%. Legalization of cannabis in multiple countries across the Asia Pacific and increasing online sales of cannabis products is expected to fuel market growth in this region.

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Key Benefits for Industry Participants & Stakeholders

• In-depth Analysis of the Global Cannabis Market
• Historical, Current and Projected Market Size in terms of Value
• Potential & Niche Segments and Regions Exhibiting Promising Growth Covered
• Industry Drivers, Restraints and Opportunities Covered in the Study
• Recent Industry Trends and Developments
• Competitive Landscape & Strategies of Key Players
• Neutral Perspective on Global Cannabis Market Performance