Cannabis Pharmaceuticals Market

Market Overview

The global cannabis pharmaceuticals market size was valued at USD 1,321.77 million in 2022. It is estimated to reach USD 82,975.99 million by 2031, growing at a CAGR of 58.4% during the forecast period (2023–2031).

Cannabis, a psychotropic substance obtained from the cannabis plant, is commonly referred to as marijuana. Cannabis Pharmaceuticals are marijuana and cannabinoids that doctors recommend for their patients. Due to production and political constraints, the medicinal use of cannabis has not been thoroughly examined. Therefore, few clinical studies have evaluated the efficacy and safety of using cannabis to treat illnesses.

The FDA is aware of the growing interest in the potential medical utility of cannabis for various conditions and the research on the potential adverse health effects of cannabis use. The FDA has not approved a cannabis marketing application for treating any disease or condition. However, the FDA has approved drugs derived from cannabis and synthetic cannabis-related drugs. These approved medication products are only available with a valid physician or licensed medical professional prescription.

Market Dynamics

Global Cannabis Pharmaceuticals Market Drivers

Transformation of Cannabis from Herbal Preparations to Prescription Drugs

Traditionally, cannabis has been used for recreational purposes. However, after years of research and growing public acceptance, cannabis is now used as medicine for many chronic disorders, such as pain management, mental disorders, and anxiety. People are turning to cannabis as an alternative to prescription medications, particularly narcotics and opioids. Cannabis is available for purchase regardless of whether a person has a medical or non-medical need. It has been observed that laws allowing access to and use of medical cannabis are not influencing individual decision-making in this area.

Additionally, clinical trials have evaluated the efficacy of cannabinoids in treating muscle spasms and neuropathic pain in patients with neurodegenerative conditions, such as multiple sclerosis. Due to these factors, cannabis-based products have found tremendous acceptance among people, supporting cannabis pharmaceuticals market growth. In addition, countries that have not legalized cannabis or cannabis-based products have allowed the import of these products owing to increasing demand and are making them available to patients through medical pharmacies to control the supply of cannabis. Hence, this transformation of cannabis from a recreational substance to a prescription drug drives the market for cannabis-based pharmaceutical products.

Emergence of Cannabis 3.0

Cannabis 3.0 is anticipated to follow cannabis 1.0 and 2.0 in the cannabis revolution. Cannabis 3.0 is expected to play a major role in providing the best results for adopting medical cannabis. Cannabis 3.0 means introducing cannabis-based products into mainstream health products, increasing consumer adoption. Some examples include CBD- or THC-infused bath bombs, topical creams, etc.

Furthermore, introducing blockchain and artificial intelligence in the cannabis industry will help in biometric tracking, product tracking from a place of origin to consumers, quality of products, and brand acknowledgment. In addition, it will be helpful for doctors who will receive real-time data and can make recommendations based on the gathered information. This revolution in the cannabis industry is expected to drive the demand for cannabis-based products and pharmaceuticals over the forecast period.

Global Cannabis Pharmaceuticals Market Restraints

Presence of Stringent Regulations on Cannabidiol-Infused Products

Despite the high demand and increasing availability of cannabidiol, several uncertainties exist regarding its safety, quality, and legality. In the European Union, seeds for planting are only to be purchased from certified providers to ensure that the right variety of hemp is cultivated, as hemp is a rich source of cannabidiol. In addition, indoor cultivation of hemp is prohibited in Europe, and only outdoor agricultural fields are permitted for hemp cultivation. In the U.S., the cultivation of cannabidiol is illegal in certain parts of the country, even though cannabidiol-infused products are available.

Owing to the presence of stringent regulations, it is difficult for manufacturers to establish a functional and completely legal channel for the production and distribution of cannabidiol. As different activities are permitted in different countries concerning the processing, extraction, and cultivation of hemp, several manufacturers are forced to carry out operations in different countries. This makes it difficult to determine the origin of cannabidiol products and who is ultimately liable for their quality. Therefore, varying stringent regulations for cannabidiol in different countries are anticipated to hamper market growth.

Global Cannabis Pharmaceuticals Market Opportunities

Growing Number of Clinical Trials

The rising number of clinical trials signifying the affirmative effects of utilizing cannabis pharmaceuticals for treating various medical conditions, such as multiple sclerosis, epilepsy, chronic pain, and cancer, is a significant factor boosting market growth. Positive outcomes from clinical trials help patients and healthcare professionals rethink their attitudes toward marijuana and pharmaceuticals derived from it. For instance, as per the data provided by ClinicalTrials.gov.in, as of 2021, there are around 408 active studies for Sativex, either recruiting, not-recruiting, or enrolling by invitation. There are currently approximately 171 ongoing clinical trials for Epidiolex that adhere to the same set of criteria.

Furthermore, looking at the growing demand for the use of cannabis, majorly CBD, for medical purposes is yet another factor propelling key players to invest in the development of cannabis-based drugs. Favorable government initiatives supporting research further increase the R&D investments by companies. These pointers have led to a shift from investments in traditional medications to cannabis-based pharmaceuticals. For instance, Insys Therapeutics, Inc. has shifted its focus from opioids to cannabinoids in recent years. Such instances signify the growing number of clinical trials and research funding that would be beneficial in creating opportunities for market growth in the coming years.

Regional Analysis

Based on region, the global cannabis pharmaceuticals market is bifurcated into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa.

Europe Dominates the Global Market

Europe is the most significant global cannabis pharmaceuticals market shareholder and is expected to grow significantly during the forecast period. In terms of region, Europe is the leading market owing to the presence of key players. For instance, GW Pharmaceuticals is the leading player in the global market and produces two cannabis pharmaceuticals, approved by regulatory authorities of various countries— Sativex and Epidiolex. These drugs have been proven to show effects for reducing certain symptoms in debilitating health conditions, such as multiple sclerosis, cancer, epilepsy, etc. European markets like the UK, Germany, and Italy are major markets owing to less stringent laws concerning sales and distribution of cannabis pharmaceuticals, namely Sativex and Epidiolex.

Furthermore, the growing adoption of cannabis-based drugs for medical purposes and changing patient behavior toward cannabis are prominent factors boosting the market growth in the region. In addition, distribution agreements by GW Pharmaceuticals in major European countries through partnerships with other key players, such as Almirall S.A., are expected to further the region's market growth over the forecast period.

North America is the second largest in the cannabis pharmaceuticals market after Europe. This is due to the region's large distribution network of Sativex, growing awareness about the medical benefits of cannabis-based products, and the easy availability of cannabis-based medicines in the region. For instance, Bayer had exclusive marketing rights for Sativex till 2020 in the region. The marketing and promotion of Sativex by such a large pharma company and huge research on cannabis-based products are factors creating awareness about the medical benefits of cannabis pharmaceuticals among the people. Similarly, the region has a large patient population affected by chronic pain, mental disorders, cancer, etc. Due to high efficiency, this population relies more on cannabis-based products than traditionally available pharmaceutical products. This is further anticipated to drive the market in the region over the forecast period.

The Asia-Pacific market is expected to grow at a faster rate in the coming years as a result of rising awareness of the advantages of cannabis-based pharmaceuticals for treating some medical conditions, including cancer, multiple sclerosis, tuberous sclerosis complex, chronic pain, and epilepsy. The rising number of clinical studies proving the positive effects of cannabis pharmaceuticals, coupled with an increasing number of countries in the region allowing the use of cannabis-based pharmaceuticals, are other factors fostering the market expansion in the region. Hence, despite uncertain and stringent regulations in various countries, the advantages associated with cannabis-based pharmaceuticals will likely fuel market growth in the Asia-Pacific region over the forecast period.

In Latin America, the market is gaining traction due to factors such as growing awareness regarding the medical benefits of cannabis, rising prevalence of health conditions requiring treatment with cannabis-based pharmaceuticals, changing government as well as consumer preference for cannabis, and an increasing number of prescriptions for cannabis-based medicines. These factors are anticipated to positively impact the market's overall growth during the forecast period.

Furthermore, growing strategic initiatives in the form of partnerships and distribution agreements between GW Pharmaceuticals and other companies with a strong presence in the Latin American region is another factor boosting market growth. For instance, Ipsen Pharmaceuticals and GW Pharmaceuticals signed an agreement in 2014 to promote and distribute Sativex in the Latin American region. Ipsen has a strong foothold in the market, which has led to the growth and adoption of the cannabis pharmaceutical—Sativex—in the region. Hence, growing awareness and rising adoption of cannabis-based drugs for treating certain conditions, such as epilepsy, multiple sclerosis, and cancer, is expected to propel market growth over the forecast period.

In the Middle East and Africa, cannabis-based products and drug regulations are stringent. The production, distribution, and consumption of cannabis, including CBD, is illegal in this region. The penalty for possession or consumption can be as severe as the death penalty in some Middle Eastern countries. For instance, possession of CBD oil in Saudi Arabia is considered an offense and an act of drug trafficking, accounting for the death penalty. UAE has strict laws for the possession of cannabis, even in small proportions. Therefore, due to highly stringent regulations in the Middle East, the cannabis market is yet to witness significant growth. Despite stringency in regulations, countries such as South Africa and Israel are gaining momentum in the growth of the cannabis market owing to rising awareness and higher patient populations in the region.

In addition, Israel is known as the research hub for cannabis, and the rising adoption and approval of cannabis pharmaceuticals in the country is expected to boost the overall market significantly in the coming years.

Segmental Analysis

The global cannabis pharmaceutical market is segmented by brand type.

Based on brand type, the global market is segmented into Sativex and Epidiolex. 

The Epidiolex segment owns the highest cannabis pharmaceuticals market share and is expected to grow significantly over the forecast period. Epidiolex is a prescription-based medicine used to treat seizures associated with Dravet syndrome, Lennox–Gastaut syndrome, or tuberous sclerosis complex detected in patients aged 1 and above. In 2018, the Food and Drug Administration (FDA) approved the utilization of Epidiolex in treating severe manifestations of epilepsy, specifically Dravet syndrome and Lennox-Gastaut syndrome. This approval has led to advancement in the development programs for proper evaluation of active ingredients in cannabis for treating medical conditions, thereby facilitating market growth. Similarly, according to the 2021 press release by GW Pharmaceuticals, Epidiolex, also traded as Epidyolex, is approved in 27 countries in the European Union, along with Norway, Liechtenstein, and Iceland.

Additionally, growing awareness and research claiming positive applications of the drug on certain medical conditions are expected to increase the adoption of Epidiolex in the coming years. For instance, clinical research initiated in 2021, sponsored by Northwell Health in collaboration with Greenwich Biosciences, is analyzing the efficiency of Epidiolex in patients suffering from electrical status epilepticus of sleep. A rising number of clinical trials is anticipated to boost the penetration of the drug over the forecast period. Likewise, various reports suggest a significant increase in the sales for Epidiolex, thereby bolstering market growth. For instance, according to a press release provided by GW Pharmaceuticals in 2021, the sales of Epidiolex increased by more than 70% in 2020, despite the COVID-19 pandemic. Such instances project substantial market growth during the forecast period.

GW Pharmaceuticals developed Sativex, renowned as the world's first prescription cannabis medicine. Therefore, GW Pharmaceuticals currently holds a prominent position and market share among all the players in the market. In addition, rising approvals of the drug for treating symptoms such as spasticity caused due to multiple sclerosis in various countries are likely to boost the growth of this brand over the forecast period. As of 2021, Sativex is approved in around 23 countries for muscle spasticity, majorly in multiple sclerosis. Out of the 23 countries, approximately 17 European nations have approved the drug's utilization in treating spasticity associated with multiple sclerosis.

Moreover, an increase in the number of clinical trials of the drug for other medical conditions such as posttraumatic stress disorder, spinal cord injury, other neurological conditions, cancer, and chronic pain is further expected to drive the market over the forecast period. For instance, a clinical study sponsored by GW Pharmaceuticals, Inc. in collaboration with Otsuka Pharmaceutical Development & Commercialization, Inc. was completed in 2018. This study aimed to analyze Sativex's effects on relieving pain in patients with advanced cancer.

Recent Developments

• March 2023- Celadon Pharmaceuticals became the first UK-based medical cannabis company to be granted a Home Office license to market its products in the UK since government reforms in 2018 opened the industry to competition.
• May 2023- Celadon Pharmaceuticals, a company dedicated to researching cannabis-based medicines, announced that it had secured a contract with a UK medicinal cannabis company to commercialize its pharmaceutical-grade cannabis product.