The Cannabis Index: Where and How Legalisation Will Move Next

Strategy Briefing

About This Report

Mar 2019

The Euromonitor Cannabis Legalisation Proximity and Attractiveness Index is the first publicly available overview of the current and future dynamism of cannabis regulation and market forces in 100 of the world’s biggest global consumer markets. Combining environmental attractiveness indicators such as population and income metrics with projections regarding the pace of regulatory change in each market the Index provides a comprehensive view of where the industry is likely to move next.

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The Cannabis Index: Where and How Legalisation Will Move Next

Key Findings

Cannabis legalization is a USD166bn opportunity

Today, on the cusp of wider global legalisation the total global demand for cannabis (legal and illegal) is estimated at around USD150 bn with legal sales account for less than a tenth. Euromonitor predicts that wider legalisation and the advent of fresh consumers and consumption missions will drive the legal market to around 80% of the total, at USD166 in 2025.

Index: Most attractive markets in Americas and Europe

In the first publicly available legalisation and attractiveness index Euromonitor has identified the most compelling global legal cannabis markets in the short to medium term and ranked 100 countries on their legal cannabis readiness. Canada, USA, Italy, Uruguay and Germany are the leading markets according to the index with the top 30 dominated by the Americas and Europe

Key choices to be made on level of state control, restrictions and taxation

As governments begin liberalise their cannabis regulations over coming years they will be making choices – on taxation, control and restrictiveness - which will shape the evolution of the legal segment in these countries. To inform these they will be looking at existing legislative models – both in legal cannabis and in other industries.

Current medical v recreational distinction will dissolve

Euromonitor expects that a key feature of future cannabis regulation will be the dissolution of the current, artificial distinction between medical and recreational cannabis which is a distinction which often speaks more to modes of access than product types or use missions.

Biggest emerging regulatory issues include substance mixing and youth access

There are a range of emergent issues in the regulatory space including substance mixing, youth access (particularly in relation to mental health), e-commerce, sustainability, cannabinoid nuance and questions around cannabis’ role in the public’s daily lives.  

Introduction

Scope
Key findings

Background and Context

Cannabis background
What is the growth potential for legal cannabis?
World cannabis regulatory status February 2019
USA cannabis regulatory status February 2019
A rolling wave of global cannabis legalisation
Cannabis as a disruptor across FMCG industries
The path to legalisation: what drives public support

The Index

Introducing the Euromonitor Proximity Index methodology
More on the scoring and methodology
Cannabis Index: top 15 markets
Cannabis Index: 16-30
Cannabis Index: 31-60
Cannabis Index: 61 - 100
Cannabis Index: top 15 by ‘sinfulness’
Cannabis Index: top 15 by socio-demographic
Cannabis Index: top 15 by cannabis legal status
What the index tells us (and what it doesn’t)

Leading Country Profiles

Canada: the godfather of the international legal industry
USA: phenomenal opportunity complicated by legal uncertainty
Italy: a leading emerging recreational market
Uruguay: a symbolic market which could export regulation
Germany: a compelling adult use market in the making
Chile: progressive regional influencer
Australia: a health-focused market embraces cannabis
Mexico: on the cusp of becoming the next fully legal market
Spain: cannabis cooperatives foreshadow a fully legal market
Netherlands: from containment to contribution
United Kingdom: momentum building for legalisation
Israel: the global cann-ovator

Making Regulatory Choices

What types of FMCG regulation exist?
Sin industries are the most resonant models for legal cannabis
Medical and pharma regimes also of strong relevance
Likely to be business as usual for CBD cosmetics
In cannabis, food and drinks become delivery vehicles
Categorising legal cannabis regulatory regimes
Categorising selected existing regulatory frameworks
Existing regulatory models: Canada and Uruguay Full
Existing regulatory models: California and Colorado Full
Existing regulatory models: Oregon and Washington Full
Existing regulatory models: Germany and Australia Medical
Existing regulatory models: Israel and Italy Medical
Existing regulatory models: Poland and Netherlands Medical
Predicting the regulatory choices markets will make

Taxation and the Black Market

The delicate nature of taxation in nascent legal cannabis markets
Excise rates in selected legal jurisdictions
The black market abides (for the moment): key drivers

Emerging Regulatory Issues

The future of regulatory framework
Regulation of CBD
Evolving regulatory landscape for CBD in EU and US
Entry of big tobacco, big alcohol: how could it influence
Regulating the interaction between cannabis and other substances
Cannabis and alcohol: the US experience
Society’s tolerance for cannabis use is likely to increase
Testing for cannabis in cars and jobs: how much is too much?
Differential regulation by cannabinoid: not likely but possible
Tell your children … what exactly?
What role will regulators play in making cannabis sustainable?
Multifaceted insurance implications from legal cannabis
Regulating e-commerce: potential issues ahead for www.eed