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The Future of Global Cannabis: Markets to Watch

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Countries around the world are amending their regulations around cannabis, moving from prohibiting to controlling and taxing these products. Euromonitor International’s new Passport Cannabis database reveals the most promising markets to watch.


The German cannabis market, both illicit and legal, is forecasted to become the largest in Western Europe by 2025, growing to EUR5.8 billion. The medical cannabis market has increased to more than EUR190 million in 2020 since legalisation in 2017. However, the COVID-19 crisis caused supply chain disruptions, meaning the three companies that started growing medical cannabis had to postpone their first production until 2021.

Adult-use cannabis is forecasted to become legal in 2025, which will slow down growth of medical cannabis. This is heavily influenced by the upcoming parliamentary election in 2021. A newly formed government will likely consist of at least two political parties where one will be in favour of legalising cannabis for recreational use. Cannabis legalisation will likely happen towards the second half of the legislative period. Both the failure of the prohibitional drug policy and the increasing pressure to stabilise the federal budget will put conservatives under pressure to liberalise the market. The illicit market is currently worth an estimated EUR3.9 billion, and a controlled cannabis market would open opportunities for new tax incomes, such as VAT, but also an excise duty similar to tobacco. Moreover, Germany’s export-oriented market will be able to tap into a relatively new industry and utilise technologies where companies could expand their knowledge and reach to eventually export their products.


The UK has considerable promise as a cannabis market, and illicit cannabis in the UK is worth an estimated £2.8 billion in 2020. Mainstream media coverage of the medical angle and dynamic CBD growth are broadening interest. The economic impact of COVID-19 is expected to drive increased political support for legal recreational sales, and public opinion is shifting in the same direction. An adult-use market is expected to emerge within the next five years; however, the regulatory framework is complex, and the rate of legislative progress is slow.

Use of cannabis-based medicine is limited, despite becoming legal in 2018. The majority of prescriptions are currently private, and evidence gathering exercises in the private sector will play a key role in influencing National Health Service (NHS) guidelines. The pace of change is forecasted to remain gradual, with steady increases in knowledge and access. Cannabis appears to have a significant role to play in UK healthcare, given time, and the value of medical cannabis in the UK is forecasted to register a compound annual growth rate (CAGR) of 180% over 2020-2025, an increase of £123 million.


In 2019 and 2020, there were shortages of medical cannabis, due to the recent recreational legalisation and the COVID-19 crisis, as producers focused their efforts on the adult-use market. As a result, the number of registered patients declined steeply, as many lapsed in registering and opted to purchase from the adult-use market instead. As a result, the Canadian medical cannabis market is expected to record a -8% CAGR between 2020-2025, declining to CAD153 million in sales. However, the decline will soften as many patients remain within the medical market, since doctor consultations in conjunction with a medical cannabis prescription provide patients with the necessary guidance needed to manage or treat certain symptoms, disorders and illnesses.

Adult-use cannabis legalisation had a rocky start in Canada, as the sophisticated illicit market beat out the recreational market on price and quality. However, in 2020, alongside improved distribution and continuing focus on quality, the adult-use market overtook the illicit market and will continue to absorb illicit share and attract new consumers, with a CAGR of 15% between 2020-2025, reaching CAD4.7 billion in sales.

Consumer interest and awareness of CBD is also growing alongside the adult-use market and is expected to record a CAGR of 25% over the next five years, reaching CAD1.1 billion in sales by 2025. Greater availability of CBD formats within the adult-use market has also introduced consumers who are looking for more specific benefits or uses for different occasions where higher THC levels are not desired. Consumer education about CBD will remain vital towards growing the market.


The largest factor expected to impact cannabis in the next five years is federal legalisation, pushing the country closer to nationwide legal adult use. Although some states may maintain prohibition, rapid growth of 364% is expected by 2025 nonetheless, reaching more than $53 billion in sales. State-level legalisation of adult use is also an important driver of growth; Arizona and New Jersey are likely to make a strong impact in 2021. As states legalise adult use, product variety continues to increase with many markets offering several options to suit sophisticated tastes. The adult-use market will also siphon medical consumers. The medical market is expected to consistently decline, with only $2 billion in sales in 2025.

CBD is also facing challenges despite impressive growth in 2019. A lack of clear labelling and poor consumer perception of product quality has hampered the category’s growth in 2020. However, CBD will still see growth through the next five years, reaching nearly $10 billion in sales by 2025.


Since the legalisation of cannabis for medicinal and scientific research purposes in Australia in October 2016, the legal cannabis market has experienced increased interest from patients and investors, which has grown the industry and product development. The medicinal cannabis market in Australia is worth approximately AUD55 million in 2020 and is expected to experience strong growth to reach AUD2.3 billion by 2025.

Recent attempts to change regulation that would allow the sale of CBD-only products for over-the-counter sale have generated optimism among industry players and a positive outlook for the market. However, sources express that this growth will likely occur at a slower speed due to the difficulty to prove efficacy at the permitted dosage, resulting in fewer product introductions.

Learn more about the future of the global cannabis market in our webinar The Evolving State of Global Cannabis: Market, Consumers and the Future.

Contributing analysts:

Germany: Linda Lichtmeß
UK: Anna Ward
Canada: Aga Jarzabek
USA: Alexander Esposito
Australia: Alejandra Cornelio

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