GVR Report cover Legal Cannabis Market Size, Share & Trends Report

Legal Cannabis Market Size, Share & Trends Analysis Report By Sources (Marijuana, Hemp), By End-use (Recreational, Medical), By Derivatives (CBD, THC), By Region, And Segment Forecasts, 2021 - 2028

  • Published Date: Jun, 2021
  • Base Year for Estimate: 2020
  • Report ID: GVR-4-68038-278-5
  • Format: Electronic (PDF)
  • Historical Data: 2014 - 2019
  • Number of Pages: 150

Report Overview

The global legal cannabis market size was valued at USD 12.8 billion in 2020 and is expected to grow at a compound annual growth rate (CAGR) of 26.3% from 2021 to 2028. Rising legalization and increasing awareness regarding the health benefits of cannabis consumption are the key factors driving the market growth. Positive consumer attitude, increasing demand for medical & recreational cannabis, and a growing number of companies catering to the rising demand are also expected to boost the market growth. According to a report published by Congressional Research Service in June 2018, approximately 30 countries in Asia, Europe, North America, and South America have permitted their farmers to grow hemp. With the full legalization, a cultural shift has been observed toward positioning the product in terms of consumer perception.

U.S. legal cannabis market size, by sources, 2014 - 2028 (USD Million)

In addition, the need for pain management remedies as a result of the rising target population is expected to drive the demand for medical cannabis over the forecast period. An observational study published in the National Library of Medicine in 2019 involved around 1,321 respondents. The survey aimed at analyzing the shift of patients with chronic pain from other treatments to cannabis. According to the survey, around 80% of respondents substituted it for traditional medicine. Out of the 80%, around 53% of respondents shifted from opioids to cannabis for chronic pain, and approximately 22% shifted from benzodiazepines to the same. This study showed the growing adoption of these products for the treatment of chronic pain. This, in turn, is expected to increase the raw material cultivation to meet the rising demands.

In addition, the consumption of cannabinoid products, such as CBD, is increasing due to positive reforms with respect to CBD. According to Gallup Survey, 2019, U.S. citizens aged between 18 and 29 years are considered most likely to use CBD and its products. For instance, around 20% of people aged between 18 & 29 years use CBD, approximately 16% of people aged between 30 & 49 use CBD, 11% of people aged between 50 & 64 utilize CBD, and around 8% of people aged above 65 use CBD. Moreover, a rise in the adoption of CBD-based edibles, foods, beverages, etc. is another factor boosting the consumption of these products.

COVID19 Legal Cannabis Market Impact: 29.6% decrease in revenue from 2019 to 2020

Pandemic Impact

Post COVID Outlook

The legal cannabis market decreased by 29.6% from 2019 to 2020

The market is estimated to witness a y-o-y growth of approximately 25% to 30% in the next 5 years

The key factors responsible for the decline in revenue include supply chain disruptions due to lockdowns in major countries and a surge in the panic buying scenarios by consumers with respect to various types of cannabis products.

The COVID-19 pandemic has led to a decrease in the strategic initiatives by many players along with some players even filing for bankruptcy. However, since situations are heading toward normalcy, there is a surge in the merger and acquisition initiatives by players, and this trend is anticipated to grow in the near future.

Although there has been an increase in the number of users during the pandemic, there has also been a substantial price decline, which has led to a decrease in the market size in terms of revenue. For instance, the prices declined by around 60% in 2020 as compared to 2019.

The R&D activities, such as clinical trials, with respect to Cannabis, also witnessed a disruption due to the pandemic. However, with recent FDA guidelines for continuing research through virtual methods, the clinical trials for cannabis are expected to continue, thereby providing affirmative growth prospects in the coming years.

 

Moreover, the COVID-19 pandemic has adversely impacted the market growth owing to the imposition of lockdown, disrupting the product manufacturing. According to the article published by Anchorage Press in August 2020, China got affected during the initial days of the pandemic owing to a rise in the number of corona cases leading to the shutdown of almost all of their manufacturing units. This, in turn, has negatively impacted the market growth. Over the years, the medical application of the product has witnessed tremendous growth, as the number of scientific studies supporting its benefits in the treatment of various diseases is increasing. For instance, Israel has conducted thorough research on the medical benefits of these products.

In countries where marijuana is restricted, people have turned to hemp-derived CBD oil to meet their medical needs. Moreover, the legalization of cannabis for adult use has driven the product demand. Furthermore, curbing the growing illicit drug market in the country is likely to support the legalization. According to previous studies from RAND Corp. and the Mexican Institute of Competitiveness, quoted in an article published in Vox in 2019, marijuana made up around 20 to 30% of the drug cartels’ revenue. Therefore, through legalization, the illicit channels can lose revenue as more consumers shift to legal purchasing avenues. 

Sources Insights

In 2020, the marijuana segment accounted for the largest revenue share of 70.8% and is anticipated to register the fastest CAGR of more than 26% from 2021 to 2028. Increasing legalization and usage of marijuana for medical as well as adult-use is expected to promote the segment growth. The usage of marijuana for medical purposes is widely accepted in countries, such as the U.S, Canada, Croatia, Italy, Czech Republic, Germany, Austria, Poland, Australia, Colombia, Uruguay, and Israel. Countries, such as Canada, Colombia, Uruguay, and the U.S., have gained a strong foothold in medical marijuana production, while Israel is focusing on developing R&D and supplying technology to other countries.

Consumers are moving towards legal purchasing of marijuana-based products, which has led to decriminalization and legalization of marijuana for medical use in some countries, thereby curbing the black market. This can be viewed as an opportunity for individual countries to improve government earnings through taxation. For instance, in 2018, the total tax collection of Chicago, from medical marijuana was USD 52.7 million. Moreover, a rapid shift has been witnessed among patients, in terms of their preferences for marijuana-based products for medical to recreational use, owing to low cost and easy access post-legalization.

Derivatives Insights

In 2020, the CBD segment accounted for the largest revenue share of more than 67% and will expand further at a steady CAGR from 2021 to 2028. This growth can be attributed to the increasing number of countries sanctioning the use of CBD for medical as well as other purposes. There are ongoing studies that signify the potential benefits of CBD on certain health conditions. For instance, in 2018, a study sponsored by GW Research Ltd. analyzed the efficiency of CBD on children and young adults suffering from Dravet Syndrome, and the results indicated the positive effects. In addition, there is an ongoing clinical study by Mclean Hospital that is analyzing the effect of CBD-based sublingual products on chronic pain.

The others segment is anticipated to register the fastest CAGR during the forecast period owing to the rising number of research claiming the benefits associated with other cannabinoids that include CBD, CBN, CBG, and CBDa. A rise in the number of companies entering the market coupled with the growing awareness regarding the health benefits of these derivatives, such as reducing inflammation, lowering serotonin levels, and relieving pain, is further expected to fuel the segment growth during the forecast period. GreenWay Herbal Products LLC, a U.S.-based company, launched a cannabinoid-based product range in 2019. Such initiatives will help in raising awareness regarding the potential benefits of the compound and thereby increase the demand in the coming years.

End-use Insights

In 2020, the medical-use segment accounted for the largest revenue share of more than 41% and will expand at the second-fastest CAGR from 2021 to 2028. The rising demand, the scope of application in the medical sector, and the legalization of medical cannabis in several countries will drive the segment growth. For instance, product usage for medical purposes has increased after its legalization in Australia. Practitioners are prescribing it to patients for the treatment of various medical conditions. Another key factor driving the segment growth includes the awareness created about the product and its associated health benefits.

Global legal cannabis market share, by end-use, 2020 (%)

The recreational end-use segment is anticipated to register the fastest CAGR during the forecast period. Countries, such as Canada, Uruguay, Colombia, and some states in the U.S., have legalized the product for adult use. Through the legalization of marijuana for adult use, governments are trying to eradicate the black market and gain a substantial amount of tax revenue, which is levied on their sale. Increasing legalization for recreational use is further anticipated to create new job opportunities and offer benefits to the overall economy. This, in turn, is positively contributing to the segment growth.

Regional Insights

North America accounted for the largest revenue share of more than 68% in 2020 and will expand at a steady CAGR from 2021 to 2028. The presence of several global companies in North America, such as Aurora Cannabis and Aphria, is the key factor driving the regional market. In addition, growing demand and positive attitude toward these products in this region are responsible for the consumption of raw as well as CBD end products. For instance, according to the latest (2020) list of top 20 producers in the North America region, published by Greenhouse Grower, Copper state Farms is one of the largest greenhouse producers in the U.S. The company has a greenhouse of almost 2 million square feet.

Asia is anticipated to register the fastest CAGR growth during the forecast period. An increasing number of users in some of the prominent countries of the region is boosting the growth of the regional market. For instance, according to Asian Cannabis Report 2019, published by Prohibition Partners, there are around 5.6 million cannabis users in China, around 0.2 million in Japan, and approximately 0.4 million users in Malaysia. In addition, growing opportunities for the production of marijuana or hemp are likely to boost the export scenario for various countries in the region.

Key Companies & Market Share Insights

Key players operating in the market focus on increasing their industry share through expansion, diversification, and other growth strategies. For instance, in 2019, CV Sciences, Inc., a major player in the U.S., announced a distribution partnership with Harris Teeter. This partnership was aimed at expanding the footprint of the former company in more than 5,400 retail locations throughout the U.S. Some of the key players in the global legal cannabis market are:

  • Canopy Growth Corp.

  • GW Pharmaceuticals, plc

  • Aphria, Inc.

  • Cronos Group

  • Tilray

  • Sundial Growers, Inc.

  • Insys Therapeutics, Inc.

  • The Scotts Company LLC

  • Cara Therapeutics, Inc.

Legal Cannabis Market Report Scope

Report Attribute

Details

Market size value in 2021

USD 17.8 billion

Revenue forecast in 2028

USD 91.5 billion

Growth rate

CAGR of 26.3% from 2021 to 2028

Base year for estimation

2020

Historical data

2014 - 2019

Forecast period

2021 - 2028

Quantitative units

Revenue in USD million/billion and CAGR from 2021 to 2028

Report coverage

Revenue, company ranking, competitive landscape, growth factors, and trends

Segments covered

Sources, derivatives, end-use, region

Regional scope

North America; Europe; Asia; Oceania; Latin America & Caribbean; Africa

Country scope

U.S.; Canada; U.K.; Germany; China; Japan; India; Thailand; Australia; New Zealand; Brazil; Mexico; Uruguay; Colombia

Key companies profiled

Canopy Growth Corp.; GW Pharmaceuticals, plc; Aphria, Inc.; Cronos Group; Tilray; Sundial Growers Inc.; Insys Therapeutics, Inc.; The Scotts Company LLC; Cara Therapeutics, Inc.

Customization scope

Free report customization (equivalent up to 8 analysts working days) with purchase. Addition or alteration to country, regional & segment scope.

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Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2014 to 2028. For the purpose of this study, Grand View Research, Inc. has segmented the global legal cannabis market report on the basis of sources, derivatives, end-use, and region:

  • Sources Outlook (Revenue, USD Million, 2014 - 2028)

    • Marijuana

      • Flowers

      • Oil and Tinctures

    • Hemp

      • Hemp CBD

      • Supplements

      • Industrial Hemp

  • Derivatives Outlook (Revenue, USD Million, 2014 - 2028)

    • CBD

    • THC

    • Others

  • End-use Outlook (Revenue, USD Million, 2014 - 2028)

    • Medical Use

      • Cancer

      • Chronic Pain

      • Depression and Anxiety

      • Arthritis

      • Diabetes

      • Glaucoma

      • Migraines

      • Epilepsy

      • Multiple Sclerosis

      • AIDS

      • Amyotrophic Lateral Sclerosis

      • Alzheimer’s

      • Post-Traumatic Stress Disorder (PTSD)

      • Parkinson’s

      • Tourette’s

      • Others

    • Recreational Use

    • Industrial Use

  • Regional Outlook (Revenue, USD Million, 2014 - 2028)

    • North America

      • U.S.

      • Canada

    • Europe

      • Germany

      • U.K.

    • Asia

      • Japan

      • China

      • India

      • Thailand

    • Oceania

      • Australia

      • New Zealand

    • Latin America and Caribbean

      • Brazil

      • Mexico

      • Uruguay

      • Colombia

    • Africa

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