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.
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.
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).
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.
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.
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.
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