World Market For Cannabis

March 2021

From a global perspective, the legal cannabis industry is a young one, undergoing the initial phases of its development. The wider legalisation and availability of cannabinoid products promises to revolutionise worldwide consumption routines and disrupt long-established legacy industries.

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Key Findings

2020 Value Growth

The legal cannabis market is expanding rapidly and will continue to do so, as wider legalisation and social acceptance drives consumers into the segment from the existing black market, or as new entrants. Cannabis sales in North America proved resilient during the COVID-19 pandemic, and this may provide an additional driver of legalisation and consumer adoption in the coming years.

% illicit of total value

Cannabis is a substance with a history of thousands of years of human use, and is currently known and consumed (no matter what governments might say) in every corner of the world. Our data estimate that 84% of total global value is currently consumed in the illicit market, which could decline to 60% by 2025 if further legalisation occurs (in a way which does not keep consumers in the black market).

2020-2025 CAGR

Beyond the hazy hype there is a broad-based growth narrative for legal cannabis. More geographies are moving from prohibition to controlling and taxing cannabinoid products. Consumers are turning to cannabis use in increasingly diverse parts of their lives – therapeutically, for relaxation, mood management and more.

Share of flower

While flower remains the major format, the modern cannabis consumer is diversifying away from the traditional image of ritual recreational flower consumption. There will still be ritual, as well as recreation, alongside a range of fresh use occasions involving innovative delivery mechanisms and sophisticated infused formulations, meaning that flower’s share will decline to around one quarter by 2025.

Growth in adult-use consumers

The fundamental driver of value growth in the global legal cannabis industry over the period to 2025 will be the wider legalisation of adult-use cannabis in the US. We project that federal legalisation will occur in 2023, adding substantial numbers of lucrative users to the total global population. Growth will also occur in other areas, with the CBD population almost doubling to 38 million regular users.

Introduction

Scope
Legal cannabis market key indicators

Global Outlook

The cannabis market in 2020: selected highlights
Consistent growth and poised for rapid expansion
Flower remains king but ceding preference to infused formats
US dominates as international markets lack maturity
Black market casts a long shadow over the legal industry
Cannabis use set to become more common and more frequent

Category and Geographic Focus

How Passport Cannabis defines the major market categories
Adult-use market dominated by the US but green shoots elsewhere
Medical cannabis set for broad expansion internationally
CBD poised for significant growth but barriers remain
US: the world’s largest market builds a head of steam
Canada: consistent growth for a maturing market
Germany: leading medical market outside North America
UK: substantial CBD market with potential for much more
Chile: deep cannabis culture may translate to commercial prospects
Australia: health-conscious market offers huge promise

The Cannabis Consumer

Current adult-use cannabis consumer types
Plotting the views and attitudes of non-users
What CBD consumers want (and how that might change)
Cannabis increasingly seen as a viable substitute for legacy products

Competitive Landscape

Global cannabis regulatory status March 2021
When it comes to legalising cannabis, how is as important as if
Key areas of emerging regulatory focus
Strategic maximalism: all things to all people
Major players: cannabis producers and brand owners
The hype cycle and cannabis valuations
Selected major M&A activity
Selected major players across the cannabis supply chain
Key areas for emerging innovation to address
Selected trends in new product development

Key Drivers Shaping the Industry

Examining five drivers shaping legal cannabis
Post-pandemic, legal cannabis’s time is coming
Regulatory momentum points to a more open future
The normalisation signals emanating from the taboo noise
The intrepid consumer: searching for natural actives
A modern industry driven by technological innovation
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