World Market For Cannabis

February 2022

From a global perspective, the legal cannabis industry is a nascent 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

2021 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 have continued to prove 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 80% of total global value is currently consumed in the illicit market, which could decline to around 65% by 2026

2021-2026 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. A range of fresh use occasions involving innovative delivery mechanisms and sophisticated infused formulations will mean that flower’s share will decline to around 27% by 2026.

Growth in adult-use consumers

The fundamental driver of value growth in the global legal cannabis industry over the period to 2026 will be the wider legalisation of adult-use cannabis in the US (and potentially internationally). Even without federal legalisation wider state-level liberalisation will add significant numbers of users. Growth will also occur in other areas, with the CBD user population growing by more than 50% to 38 million.

Introduction

Scope
Legal cannabis market key indicators

Global Outlook

The cannabis market in 2021: 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
Headwinds for wider CBD category growth
US: the world’s largest market continues to expand
Canada: consistent growth for a maturing market
Germany: major medical market shows adult-use promise
UK: substantial CBD market with potential for much more
Israel: leading cannabis market prepares to take a step further
Mexico: huge potential but legislative delays persist

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 February 2022
Pragmatic acceptance of wider cannabis legalisation growing
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 surrounding cannabis corporations
Selected major M&A activity
Selected significant CPG corporate activity in cannabis
Selected major players across the cannabis supply chain
Focus on: The Parent Co
Focus on: Charlotte’s Web
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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