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

Report Description

US Cannabis Market Outlook 2031:

The US cannabis market size  size was valued at USD 13.20 Billion in 2022 and is projected to reach USD 43.61 Billion by 2031, expanding at a CAGR of 14.2% during the forecast period 2023 - 2031. The growth of the market is attributed to the common use of cannabis products for various applications in industries such as cosmetic, pharmaceutical, and food & beverage.

Despite its quasi-legal status, the market is expected to exhibit exponential growth due to gradual expansion of hemp legalization in several states in the country.

As more states approved marijuana legalization, the market has grown significantly in recent years. As of 2019, marijuana was made legal in 33 states and several states are under the process of legal approval of the products for medical, recreational, or both purposes. This has resulted in an increase in the number of business startups, which has aided in collectively driving the market.

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Cannabis plant, a key source of marijuana, is widely adopted to treat patients having chronic illnesses including cancer, Parkinson's disease, Alzheimer's disease, and neurologic problems such as depression and epilepsy. According to a study published by the International Agency for Research on Cancer (IARC), the global burden of cancer was around 18.1 million new cases and 9.6 million deaths in 2018.

Keeping the view of surging illegal trade of cannabis products in the US, industrial companies and government officials are working towards for striking a balance between combating illegal marijuana usage and maintaining a safe and controlled supply. However, the country's illicit cannabis sector is thriving as items sold through illegal channels are costing less than those available in the market officially.

Furthermore, politicians are working towards resolving issues between federal and state regulations to curb stifle of the market growth. Owing to the unavailability of long-term banking solutions, cannabis businesses in the country have been forced to conduct transactions in cash, which has resulted in financial security issues such as money laundering.

States in the United States are addressing these issues by allowing cannabis credit co-operatives to aid business development to ensure accountability in the financial transaction related to cannabis trade. Section 280E of the federal tax code prohibits the deduction of ordinary business expenses related to the "trafficking" of Schedule I drugs.

Market Trends, Drivers, Restraints, and Opportunities

• Wide applications of the cannabis products for the therapy of chronic illness and health conditions related to depression and psychological disorders are expected to drive the market growth. 
• Increasing demand for medical requirement and solutions for pain management and anxiety management therapies for patients are anticipated to boost the market growth during the forecast period.
• Growing support from government regulatory bodies and rising legalization of cannabis products for medical use in various states of the country present key driving factor for the market.
• High cost of cannabis extraction and serious side effects such as hallucinations, dizziness, lung problems, and impaired mental functioning are major challenges that can hamper the market expansion.  
• Wide use of cannabis products for recreational use and regulatory bodies’ move to combat the illegal trade practice are likely to create several opportunities for the market expansion.

Scope of US Cannabis Market Report

The report on the US cannabis market includes an assessment of the market, trends, segments, and regional markets. Overview and dynamics have also been included in the report.

Cannabis Market Segment Insights

Medical segment is projected to account for a large market share

Based on cannabis types, the US cannabis market is bifurcated into medical and recreational. The medical segment is expected to account for a key share of the market during the forecast period owing to the rising demand for marijuana for various applications of medical conditions. Given to its expanding acceptability for the treatment of chronic conditions such as cancer, and mental disorders, the medical segment held a major revenue share in 2020.

Moreover, multiple states have legalized cannabis for medical use but adopted limited policies to allow the plant for recreational usage. Government programs regulate medical cannabis distribution; thus, vendors have to adhere to strict quality control requirements. As the scientific studies are supporting marijuana's benefits in the treatment of numerous disorders, the medical application of marijuana has seen enormous growth.

However, the recreational segment is projected to account for a key market share in the coming years as marijuana is available without prescription and is increasingly used as a psychoactive drug or a food additive. Only a few states in the country have made it lawful to use for recreational purposes.

Additionally, state governments are attempting to remove the illicit trade practice by legalizing recreational marijuana and focusing on obtaining a significant amount of tax income from the sale of these items.

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Oil segment is expected to exhibit a rapid growth rate

On the basis of product types, the market is divided into buds, oils, and tincture. The buds segment is expected to account for a key share of the market during the forecast period. Dried buds are smoked and have been used to cure a range of illnesses, including cancer and Alzheimer's disease. Buds are also less expensive than oral medications or tinctures, which encourage the extensive use of the products.

However, the oil segment is anticipated to exhibit a rapid growth rate during the forecast period owing to a greater focus on prescribing essential oils to children for the treatment of illnesses such as epilepsy. Moreover, owing to these benefits of medical marijuana oils, doctors have started recommending marijuana oils for several therapy purposes. This is likely to propel the oil segment during the projection period.

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Chronic pain segment is anticipated to register at a substantial CAGR

Based on medical applications, the US cannabis market is segmented into chronic pain, mental disorder, cancer, and others. The chronic pain segment is expected to constitute a key share of the market during the forecast period due to a vast patient population suffering from medical conditions/trauma linked to chronic pain.

Cannabis for mental diseases such as epilepsy is legal in most states in the US, making it a fast-growing medical application area. Furthermore, the number of persons suffering from epilepsy has risen in recent years. The number of adults suffering with epilepsy increased from 2.3 million in 2010 to 3 million in 2015, according to the US Centers for Disease Control and Prevention (CDC).