Global spending on legal cannabis will skyrocket to $57 billion by 2027, according to a report released this week by Arcview Market Research, in partnership with BDS Analytics. That’s a lot of marijuana.
The in-depth report, titled “The Road Map to a $57 Billion Worldwide Market,” predicts that adult-use recreational cannabis will make up $38.3 billion of spending, while medical marijuana will reach $19.1 billion. The report reveals that the United States and Canada will continue to drive industry growth, expanding from $9.2 billion in 2017 to $47.3 billion by 2027.
While that growth looks large, it actually is a comparatively modest 18 percent compound annual growth rate (CAGR). The rest of the world is forecast to grow from $52 million in 2017 to $2.5 billion in 2027 for a CAGR of 47 percent.
“Outside the United States and Canada, it will be almost wholly a medical-only business until the United Nations revamps the 1961 Single Convention on Narcotic Drugs, which will likely only come after the United States’ Federal Government ends prohibition, which we don’t expect until 2021,” said Troy Dayton, CEO of The Arcview Group.
While the adult-use market will dominate in North America, it’s the medical market that will see the most growth overseas, the report forecasts. In most other developed nations, the federal government subsidizes health care. Europe, which has 739 million people and more than $1.5 trillion in healthcare spending, has the potential to be the largest medical cannabis market in the world.
“California gets the media attention and Canada gets the investment dollars as they allow adult use, but Germany’s move to make cannabis flower available for medical use in pharmacies was really the big news of 2017 from a worldwide perspective,” said Tom Adams, Editor-in-Chief at Arcview Market Research and Principal Analyst at BDS Analytics. “The tables have turned in favor of legalization across the world and we predict that the trend will spread as research continues to support cannabis’ effectiveness as a medication.”
Among other findings, “The Road Map to a $57 Billion Worldwide Market” reveals:
- Initially, the decision by many US states and Canada to launch medical-only regulatory regimes prompted many other countries to allow limited access to cannabis-based pharmaceuticals. But, now, California’s and Canada’s willingness to move on to adult-use legality has triggered a new wave of laws liberalizing access to medical cannabis.
- South America medical markets are some of the most liberally licensed in the world. The continent’s legal spending is set to grow from $125 million in 2018 to $776 million in 2027, led by Brazil, Argentina, Uruguay (the only country in the world in which adult use is legal today), and Peru.
- Germany positioned itself as the leader of the European market, while Italy is expected to be the second-ranked cannabis market on the continent with $1.2 billion in sales by 2027.
- Total legal cannabis spending in Australia is forecast to grow from $52 million in 2018 to $1.2 billion in 2027, a CAGR of 53%, making is the 5th largest market in the world.
- Israel’s long history of legal medical use has fostered a sizable regulated market for such a modest population, but it leads other countries by years in the development of cannabis pharmaceutical applications.
- The success of the Canadian system of Licensed Producers and mail-only distribution, as evidenced by the country’s willingness to move on to adult-use legality, has prompted a new wave of laws liberalizing access to medical cannabis.