The legal cannabis market has been on the rise for quite some time. Statistics published in Stellar Market Research’s new report indicate that the industry is set to continue skyrocketing. The market was valued at USD $28.26 billion in 2021, and total revenue is predicted to surge at a compound annual growth rate (CAGR) of 32.04% between 2022 and 2027.
According to industry analysts, the cannabis market will soar to a valuation of $149.8 billion by the year 2027. The new report examines market growth drivers and segments. Several notable participants provided data for the report, highlighting a handful of dominant regions, including APAC, Europe, MEA, North America, and South America.
Key data analysis featured in the report extends over a three-year historical period from 2017-2020. In addition to the unique cannabis markets, challenges, growth drivers, limitations, and opportunities featured in Stellar Market Research’s detailed analysis, the report also features investor recommendations.
What Is Driving the Cannabis Market to Such Highs?
Researchers from Stellar Market Research have outlined several key factors stimulating industry success, including increasing disposable incomes. According to the report, the increasingly aging population and illness amplify the demand for medicinal cannabis. Older adults face a higher risk of developing chronic diseases, such as arthritis, cancer, epilepsy, and migraines. As a result, more physician visits are necessary.
The researchers also spotlighted rising demand in the agriculture sector for legal cannabis. Pesticides can be created using recreational cannabis, thus offering agricultural workers the opportunity to utilize a less harmful option than conventional pesticides.
Furthermore, the report emphasizes that cannabis offers a safer alternative to traditional treatment options and produces fewer adverse side effects. Additionally, cannabis-based medicines allow patients to minimize their opioid dosage and frequency while still benefiting from pain relief.
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What Is Holding the Cannabis Market Back?
As a plant that is shrouded in misconception, many governments are outlawing the use of cannabis. Even though cannabis is permitted in specific regions of Africa, Europe, North America, and South America, it is still forbidden by law in the majority of Middle Eastern and Asian countries, including Japan, India, and Korea. Due to these strict regulations, consumption, possession, purchase, and sale are deemed criminal acts. Consequently, cannabis market growth is somewhat restricted.
The potentially adverse side effects of specific cannabis strains—particularly those rich in the psychoactive compound delta-9 tetrahydrocannabinol (THC)—hinder market growth. The Stellar Market Research team also noted the addictive nature of cannabis as one of the restraints to the cannabis market. While cannabis is believed to be non-addictive, dependence on the plant has been explicitly documented.
What Opportunities Exist in the Cannabis Market?
Cannabis legalization is unfolding across the Asia Pacific region—something that has been largely stimulated by the rise of legal cannabis across most nations in Europe, North America, and South America. China, which already boasts a significant market for industrial hemp, is expected to emerge as a serious contender for industrial cannabis in the foreseeable future.
A focal point of the report was that many key players in the cannabis businesses are patiently waiting for legislative advancement in the Asia Pacific area. If and when this happens, numerous countries across the region stand to reap the rewards of large-capacity, low-cost production. Researchers believe that this will open up immense opportunities for legal cannabis.
How Is the Market Segmented?
To achieve a clearer understanding of growth drivers in the legal cannabis industry, researchers segmented the market as follows:
- By Type — Concentrates and Flowers are the two main avenues of the cannabis market regarding product type. Flower products made up 57% of the market share in 2022, with marijuana flowers containing between 25%-30% THC, 0%-1% CBD and minimal levels of other cannabinoids.
- By Application — Medicinal Application and Recreational Application are the two main segments of the cannabis market by application. In 2021, medicinal applications had a 65% market share, whereas recreational applications had 35%.
What Regional Insights Were Drawn From the Report?
Some of the key takeaways of this report were as follows:
- North America claims the top spot in the cannabis market, with a market share of 37% in 2021.
- Europe trails closely behind with a market share of 31% in 2021.
- South America earned 21% of the market share during the same year.
- Asia Pacific has earned a market share of 7% and is predicted to inflate faster than any other market as the laws become more firmly established in future.
- Africa & Middle East has the lowest market share of 4%.
Click here to read the full cannabis market report from Stellar Market Research.