GVR Report cover U.S. Cannabis Market Size, Share & Trends Report

U.S. Cannabis Market Size, Share & Trends Analysis Report By Cannabis Type (Medical, Recreational), By Product Type (Buds, Oils, Tincture), By Medical Application (Chronic Pain, Mental Disorder, Cancer), And Segment Forecasts, 2019 - 2025

  • Published Date: Jul 2019
  • Report ID: GVR-2-68038-978-4
  • Number of Pages: 137
  • Format: Electronic (PDF)
  • Historical Data: 2014 - 2017

Industry Insights

The U.S. cannabis market size was valued at USD 11.3 billion in 2018 and is expected to register a lucrative CAGR of 14.5% over the forecast period. Cannabis, or marijuana, is very commonly used in the U.S. by cosmetic, pharmaceutical, and food and beverage industries. The market has been witnessing exponential growth despite its quasi-legal status and companies are striving to keep up with its growing demand and frequent legal changes pertaining to each state in the country.

The marijuana market has grown significantly over the past few years as more states have legalized it. As of 2019, 33 U.S. states and the District of Columbia have legalized marijuana for medical, recreational, or both purposes. This has encouraged an influx of business startups, which has further helped in collectively driving the market.

California cannabis Market

Medical marijuana is used for treating patients with chronic ailments such as Alzheimer’s disease, cancer, arthritis, Parkinson’s disease, and neurologic problems like depression, anxiety, and epilepsy, a factor that can help reduce disease burden in the country. In 2018, the International Agency for Research on Cancer (IARC) reported the global burden of the diseases to have risen to 18.1 million new cases and 9.6 million deaths in the same year. Increasing requirement of pain management therapies associated with chronic diseases like cancer across the country is expected to drive demand for medical marijuana over the forecast period.

As more states legalize the use of marijuana for recreational or medical use, the legal demand is expected to increase. Combating the illegal market and potentially generating revenue from new job opportunities and businesses are key factors behind this move. Industrial players and public officials are focusing on balancing safety and health as they expect to undermine the illegal use of marijuana and ensure a safe and controlled supply. However, the illicit cannabis market in the country is very high, as the price of products sold via illicit channels is very less compared to that of the drug sold legally. Moreover, policymakers are keen on addressing conflicts between federal regulations and state that impede the growth of the industry, which if rules out to be in favor federal legalization, will exponentially drive the overall market in the country.

The unavailability of permanent banking solutions has compelled businesses in the country to transact with cash, which is creating financial security problems such as money laundering. U.S. states are working around these challenges by authorizing cannabis credit co-operatives to aid business development, which may help the market to a certain extent. Section 280E tax code at the federal level prohibits the deduction of ordinary business expenditure related to the “trafficking” of Schedule I drugs. This tax burden incentivizes the engagement of businesses in the black market and is thus dampening growth.

Marijuana Type Insights

Based on marijuana type, the medical segment accounted for the largest revenue share in 2018 with a revenue of USD 7.2 billion owing to its growing acceptance for the treatment of chronic diseases such as pain, cancer, and mental disorders. One major reason for the dominance of the medical segment in the U.S. is several states legalizing the medical use of cannabis compared to the few that have only legalized it for recreational use. Medical cannabis distribution is regulated by government programs and therefore it is necessary for suppliers to maintain mandated quality control on the products.

Over the years, the medical application of marijuana has witnessed tremendous expansion as the amount of scientific literature supporting its benefits in the treatment of various diseases is growing. As the number of U.S. states legalizing medical cannabis is increasing, the market is expected to witness lucrative growth over the forecast period. Furthermore, the medical conditions for which marijuana is being used are also increasing, which is expected to open up new avenues for growth.

Recreational marijuana is used as a psychoactive drug or a food ingredient and is available to consumers without a prescription. Very few states in the U.S. have legalized its usage for recreational purposes. Through the legalization of recreational marijuana, governments are trying to eradicate the black market and focus on gaining a substantial amount of tax revenues levied on the sale of these products.

Medical Application Insights

The application areas for marijuana can be classified into chronic pain, mental disorders, cancer, and other medical conditions. Chronic pain accounted for the largest share in 2018 and is expected to grow at a lucrative rate over the forecast period. This due to a large patient base and a number of medical conditions/trauma associated with chronic pain. On the other hand, the number of medical indications for which marijuana is used is increasing with favorable reforms in state regulations.

The use of cannabis for mental disorders such as epilepsy is permitted in most U.S. states and is therefore the fastest-growing medical application segment. Moreover, as cannabis has been found to be useful for the treatment of epilepsy, the prescription and adoption rate for the same is also high. Moreover, the number of people suffering from epilepsy have increased over the past few years. For instance, according to the Centers for Disease Control and Prevention (CDC), the number of adults suffering from epilepsy in 2010 increased from 2.3 million to 3 million in 2015.

Product Type Insights

The buds segment dominated the U.S. cannabis market in 2018 with a revenue of USD 7.8 billion and is expected to grow at a lucrative rate over the forecast period. Dried buds are used for smoking and have found widespread application in treating a variety of diseases like cancer and Alzheimer’s. Furthermore, buds are more affordable than oral products or tinctures, which increases its adoption.

us-cannabis Market

The oil segment is anticipated to witness the highest growth during the forecast period. This growth can be attributed to increasing emphasis on prescribing oils for children for the treatment of disorders like epilepsy. Smoking marijuana has posed difficulties in quantifying accurate information about the consumption of CBD, THC, and other components that are part of the dosage. These advantages of medical marijuana oils compared to smoking, along with the increasing preference for marijuana oils by doctors, are expected to drive the oil segment over the forecast period.

Regional Insights

California accounted for the largest share in the U.S. market in 2018 and is expected to grow at a significant rate over the forecast period. The market expansion in this state can be attributed to the expanding population base and a growing number of cannabis businesses. Furthermore, the state has legalized both forms of marijuana use i.e. medical and recreational, which considerably increases product adoption.

New standards pertaining to the medicinal use of marijuana were established in 2015. There were updated regulations implemented for the growing and licensing of cannabis businesses. Later, in 2016, Proposition 64 was sanctioned, which legalized the recreational use of marijuana in the state. This legalization opened up various avenues of increasing revenue, such as the surge in employment, long-term benefits for investors in this business, and revenue generation for the government.

The state of New York also accounted for a major revenue share in 2018 as a result of cannabis legalization for treating medical conditions such as chronic pain and mental disorders. The number of people using marijuana is anticipated to increase owing to fewer limitations, lower prices, and ease of access. Furthermore, the state government is expected to legalize the recreational use of marijuana in 2019 and levy taxes on marijuana and its products, which is expected to exponentially drive the market over the next few years.

U.S. Cannabis Market Share Insights

Some of the players operating in the U.S. marijuana market are Green Man Cannabis, Los Suoenos Farms LLC, and Vireo Health of New York. Industry players are focusing on increasing their penetration in the state within which they operate to strengthen their foothold. For instance, in January 2018, Green Man Cannabis launched ONE Cannabis, a cannabis retail franchise in the U.S. This franchise is focused on providing optimal retail experience to modern marijuana consumers while making it more accessible and acceptable in the U.S. market.

However, the ban on inter-state trading across the country is expected to hamper market growth and this has created a demand and supply gap due to surplus production in some states. Furthermore, the banking sector has witnessed a change after the legalization of cannabis in various states. Banking access remains a problem for cannabis businesses seeking financial help. One of the reasons for this is the illegal nature of recreational marijuana under federal laws. This is also the reason for certain banks not allowing accounts to such businesses, which has led to economic challenges and unfavorable situations.

Report Scope



Base year for estimation


Actual estimates/Historical data

2014 - 2017

Forecast period

2019 - 2025

Market representation

Revenue in USD Million & CAGR from 2019 to 2025

Country scope


State scope

Washington, Oregon, California, Nevada, D.C., Georgia, Alaska, Colorado, Michigan, Maine, Vermont, Massachusetts, Montana, Utah, Arizona, New Mexico, North Dakota, Oklahoma, Missouri, Arkansas, Louisiana, Illinois, Minnesota, Ohio, West Virginia, Pennsylvania, Maryland, Delaware, New Jersey, New York, Connecticut, Rhode Island, New Hampshire, Florida

Report coverage

Revenue forecast, company share, competitive landscape, growth factors and trends

15% free customization scope (equivalent to 5 analyst working days)

If you need specific information, which is not currently within the scope of the report, we will provide it to you as a part of customization

Segments Covered in the Report

This report forecasts revenue growth country and state levels and provides an analysis on latest industry trends in each of the sub-segments from 2014 to 2025. For the purpose of this study, Grand View Research has segmented the U.S. cannabis market report on the basis of marijuana type, product type, medical application, and country:

  • Cannabis Type Outlook (Revenue, USD Million, 2014 - 2025)

    • Medical

    • Recreational

  • Product Type Outlook (Revenue, USD Million, 2014 - 2025)

    • Buds

    • Oils

    • Tinctures

  • Medical Application (Revenue, USD Million, 2014 - 2025)

    • Chronic Pain

    • Mental Disorders

    • Cancer

    • Others

  • Regional Outlook (Revenue, USD Million, 2014 - 2025)

    • Washington

    • Oregon

    • California

    • Nevada

    • District of Columbia

    • Georgia

    • Alaska

    • Colorado

    • Michigan

    • Maine

    • Vermont

    • Massachusetts

    • Montana

    • Utah

    • Arizona

    • New Mexico

    • North Dakota

    • Oklahoma

    • Missouri

    • Arkansas

    • Louisiana

    • Illinois

    • Minnesota

    • Ohio

    • West Virginia

    • Pennsylvania

    • Maryland

    • Delaware

    • New Jersey

    • New York

    • Connecticut

    • Rhode Island

    • New Hampshire

    • Florida

gvr icn


gvr icn

This FREE sample includes market data points, ranging from trend analyses to market estimates & forecasts. See for yourself.

gvr icn


We can customize every report - free of charge - including purchasing stand-alone sections or country-level reports, as well as offer affordable discounts for start-ups & universities.

Contact us now to get our best pricing.

BBB icon D&B icon

We are GDPR and CCPA compliant! Your transaction & personal information is safe and secure.