As attitudes to cannabis evolve, increasingly shaped by medical and health considerations, disillusionment with legacy substances and growing social acceptability of cannabis use, legislation is on the cusp of radical change in a number of countries. Liberal democratisation and controlled application in support of wider societal goals foreshadow significant economic considerations, and with this, the vast potential offered through formal, recreational sales of adult-use products.
In this article, we identify eight of the next most significant prospective markets for cannabis in 2023.
Germany, Netherlands and Switzerland – a precedent for Europe
With sales of USD920 million in 2022, Germany is the world’s fourth biggest market for cannabis, and legalisation of adult-use products is underway. This has proved a lengthy and inevitably cautious process, with Germany approaching the EU for final ratification and accordant acceptance from neighbouring countries. Legalisation is unlikely to happen before 2024, but once established, a strictly regulated market with controlled supply chain will set a clear precedent to other countries.
The Netherlands and Switzerland look set to engage in further pilots for recreational sales of adult-use products in 2023, and if Germany emerges as a tested and proven working example, this can be expected to support and accelerate these trial initiatives.
Israel: An outlier to watch
Israel is an interesting market to note, characterised by a progressive stance on usage and pioneering medical and scientific research into cannabis. Existing prevalence is high, and there is a general political consensus in support of the legalisation of adult-use products, which could happen as early as 2024.
Sales of cannabis in Israel set to reach USD3.4 billion by 2027
Source: Euromonitor International Passport Cannabis Database
Sales are nascent at present, but this positive environment for growth is expected to see sales rise as high as USD3.4 billion by 2027. This would see Israel overtake Germany to become the world’s third highest value market for cannabis.
Cannabis and tourism in Thailand
In 2022, Thailand became the first nation in Asia to effectively decriminalise cannabis and legalise home cultivation of plants. While still controversial, the economic importance of tourism to Thailand is a significant motivation for new regulation and formal control to avoid mis-use, and the country would appear to be drawing closer to legalisation of commercial, adult-use products. However, the situation is not without ambiguity, and the possibility of blurring between medical use and recreational use for foreign visitors.
This makes Thailand something of a wild card for comparison with other national markets, but sales prospects are likely to be high, currently estimated at USD2.3 billion by 2027.
Chile, Mexico and Colombia: Good prospects but slow path to legal reality
Chile, Mexico and Colombia are the Latin American markets most likely to legalise sales of cannabis first. Cannabis is effectively decriminalised for personal use and cultivation of home grown plants is legally sanctioned. But while the prospect of full legalisation is gaining momentum, to the point where it almost seems inevitable, passage into law is complicated and prone to delay.
In Chile new legislation to fully legalise adult-use consumption was rejected in 2022, and is now unlikely to be legalised before 2026. Similar legislation has been granted preliminary approval in Colombia, but faces further review in 2023 before passing into law. Legalisation is in ongoing review in Mexico, and looks increasingly viable, but the time taken to approve and implement into law is unlikely to see recreational sales established before 2027.
For further insight, see the related blog piece Key Trends for Cannabis in Japan: New Regulation and New Opportunities in 2023.
Euromonitor International offers detailed analysis, statistics and insight covering the 24 most important national markets for cannabis. These reports are available to buy here.