Legalized Cannabis Market

Market Overview

The legalized cannabis market size was valued at USD 21.75 billion in 2022 and is projected to reach a value of USD 162.05 billion by 2031, registering a CAGR of 25.0% during the forecast period 2023-2031.

Cannabis is one of the most commonly cultivated, trafficked, and illicit drugs and is primarily used for medicinal and recreational purposes. Some prominent pharmaceutical companies and medical drug manufacturers use cannabis to create medicines that help control/reduce severe or long-term pain, nausea, and vomiting due to chemotherapy, Parkinson's disease, glaucoma, neuropathy, and others. These advantages have led to the legalization of cannabis in many countries, but only as synthetic prescription cannabinoid products. For recreational purposes, cannabis is still considered illegal in many countries. For instance, Montana, North Dakota, Arizona, and Pennsylvania are some of the states where cannabis is used for only medicinal purposes.

Attributing its psychoactive properties, cannabis has taken root in various sectors, including healthcare, consumer goods, pharmaceutical, textile, and agriculture. However, if taken in large quantities, cannabis can cause hallucinogenic effects. It is often referred to with different names or slang depending on the region; some of these include grass, pot, joint, stick, buckets, hash, herb, mull, buddha, ganja, skunk, hydro, yarndi, smoke weed, reefer, dope comes, and hooch.

Market Dynamics

Global Legalized Cannabis Market Drivers

Legalization

Numerous nations worldwide have banned the use of marijuana as a recreational drug. Several nations, including Uruguay and Canada, and several states in the United States, have legalized the production, sale, and possession of marijuana for recreational and medical purposes as a consequence of arduous legalization campaigns. This widespread legalization of marijuana can impact the local economy and social structure. Legalization allows governments to control marijuana production and sales on a case-by-case basis, assuring the drug's contribution to the nation's GDP. 

Health and Safety

Cannabis has improved public health and safety. Public health and safety preservation is a crucial goal of marijuana legalization in Canada. Cannabis legalization and stringent, health-focused regulation by the Centre for Addiction and Mental Health (Canada) offers a chance to lessen the adverse effects of marijuana use. Existing regular marijuana users anticipate purchasing more frequently if it becomes legal. The less regular shoppers also anticipate making purchases more frequently and shelling out a disproportionately higher amount of money each time. Therefore, as cannabis becomes more legal, demand will rise, propelling the expansion of the global legal cannabis market.

Global Legalized Cannabis Market Restraints

Contradictory issues on cannabis use by the public

The industry will be constrained by the multiple contradicting findings regarding cannabis use, including mucus composition, chronic cough, and respiratory conditions like COPD. This way, marijuana will be widely legalized, which will affect the economies and cultures of the nations where it is authorized. To make marijuana manufacturing and distribution legal, officials must use application-based regulations, increasing the nation's GDP. In addition to reducing related crime rates, legalization helps eradicate gangs and black-market traffickers.

Global Legalized Cannabis Market Opportunity

Growing Business

Financial institutions are a significant sector for cannabis business expansion. In recent years, banks and other financial institutions have become more interested in cannabinoid-based firms. This is partly caused by the fact that cannabis businesses typically adhere to banking laws. This has made many finance and revenue-growth opportunities for cannabis enterprises possible.

Cannabis is also having a significant impact on the medical industry. Several medical marijuana businesses attempt to generate money through initial public offerings (IPOs). These businesses can access a lot of funding, enabling them to grow their businesses and reach more customers. 

Regional Analysis

To comprehensively evaluate the global legalized cannabis market, we have explored the market across five regions: North America, Europe, Asia-Pacific, Latin America, the Middle East, and Africa.

North America

North America dominates the global market, with the legalization of cannabis in different U.S. states further driving market growth. North America held the largest share of the legalized cannabis market in 2019 and is expected to dominate throughout the forecast period. The consumption of cannabis in various states for medicinal and recreational purposes drives the regional market's growth. Currently, marijuana is legal for medical purposes in 23 states across the U.S., and in 11 states, it can be used for medicinal and recreational purposes.The legalization of cannabis in different states across the U.S. and countries across North America is anticipated to create a lucrative growth opportunity for the global cannabis market. The U.S. federal government's initiatives to legalize the production and cultivation of hemp is another factor expected to augment the growth of the regional market.

LAMEA

Uruguay dominates Latin America's market. Uruguay, Colombia, and Argentina drive the growth of Latin America's global market. Uruguay legalized cannabis for recreational and medicinal purposes in 2013, and the country dominates the regional market. In Argentina and Chile, cannabis is legalized only for medicinal applications.

Europe

Medical Use to drive growth of Europe's market. Europe's cannabis market is driven by medical uses, such as relieving insomnia, stress, anxiety, and spasticity. Some European countries where cannabis is used for medicinal purposes include Croatia, the Netherlands, Germany, Greece, Italy, Peru, Poland, Luxembourg, and Portugal.

Asia-Pacific

Asia-Pacific Market slated to gain traction with more & more countries legalizing cannabis. Gradually, In Asia-Pacific, Australia and New Zealand have legalized cannabis for medicinal purposes. These countries plan to legalize cannabis to fight the black market entirely. Thailand became the first country in South East Asia to legalize cannabis in 2019. The country removed low-level cannabis and hemp extracts from its list of banned narcotic substances, allowing each household to grow six marijuana plants. Such government initiatives are expected to boost the growth of the legalized cannabis market during the forecast period.

Segmental Analysis

For better understanding, the market is segmented based on usage, form, application, and region.

By Usage Analysis

Based on usage, the market is sub-segmented into Medical, Recreational, and Industrial Hemp, where the medical segment dominates.

Medical

According to market trends, pharmaceutical products may contain cannabinoids or cannabinoid-like substances for medicinal use. Some of the well-known medications made from hemp include SativeMarinol and Cesamet. The product has been used to treat conditions such as multiple sclerosis, treatment-resistant epilepsy, chronic pain, and others in the medical industry. Cannabidiol (CBD) use, in particular, and the rise of the medical marijuana business, has been made possible by the health and wellness trend permeating the worldwide economy. An increasing body of studies indicates that CBD may help treat various conditions, including cancer, chronic pain, anxiety, and epilepsy.

By Form Analysis

Based on form, the market is again divided into Bud, Oil, and Tincture, where bud dominates.

Bud

The most popular consumable product on the international market is marijuana flower, or "bud." A typical "bud" contains minimal amounts of other cannabinoids along with 15% to 30% THC, 0.1% to 1% CBD, and other cannabinoids. This idea is used in vaporizers, which are quickly gaining popularity. Sophisticated vaporizers are being created to maintain temperatures that target the activation of specific cannabinoids. Cannabinoids boil at temperatures lower than those at which flowers burst.

Oil

Any cannabis extract, whether from a cannabis plant or a hemp plant, can be roughly referred to as "cannabis oil." Cannabis oils are frequently sold and used in conjunction with a broader range of goods with different cannabinoid profiles and concentrations.

Tincture

A tincture is a herbal or plant-based medical treatment with an alcohol or water base. Cannabis tinctures are taken orally, sublingually, or added to food or beverages and include a variety of cannabinoids. Tinctures, frequently sold in glass vials, provide a straightforward, smokeless, and manageably dosed way to consume cannabis.

By Application Analysis

By application, the market is further bifurcated into chronic pain, cancer, and mental disorders; chronic pain is expected to dominate the market.

Chronic pain

Cannabis is mainly used to cure chronic pain. Due to a growth in the use of medicinal marijuana as a successful treatment for chronic pain, thanks to the drug's ability to decrease pain sensations and its anti-inflammatory qualities.

Cancer

Marijuana use has been shown in a few small studies to lessen specific chemotherapy adverse effects. When traditional anti-nausea drugs are ineffective, the FDA has additionally approved the synthetic cannabinoids dronabinol (Marinol, Syndros) and nabilone (Cesamet) to treat these symptoms.

Mental disorders

Cannabis has been used therapeutically for millennia. There are numerous anecdotal tales of people using it as a kind of self-medication to treat psychiatric disorders (e.g., anxiety, depression, and mania). Epidemiological research has consistently shown that extensive cannabis usage is linked to psychiatric consequences, particularly for those predisposed to psychosis or mood disorders. As a result, there is conflicting data to support cannabis-based therapies for treating mental diseases.

Recent Developments

• In May 2022, Aurora Cannabis Inc. announced a financing deal worth US$125 million.
• In June 2022, Geocann and Cronos Group collaborated to use VESIsorb® Delivery Technology for quicker absorption.
• In June 2022, A THCV Equity Milestone was reached, according to Cronos Group and Ginkgo Bioworks.