Cannabis market to be worth $66.3 BILLION by 2025

Cannabis market to be worth $66.3 BILLION by 2025

The cannabis market has exploded over
the past few years, with public companies now being listed on the stock market
alongside timeless well-established businesses, dispensaries selling weed
across a plethora of states and even CBD gummy bears being sold in almost every
store.

Some have called it a hype-driven
bubble, while others have labelled it as a long-awaited coming of age for the
popular herb that has been taboo following Richard Nixon’s war on drugs in the 1970s.

However, regardless of opinion on
whether it’s a bubble or not, recent figures have suggested that the budding
sector is expected to experience an annual growth rate of 23.9% up until 2025,
where it may well reach the dizzying heights of $66.3 billion in market worth.

The global prediction by Grand View Research is identifying massive growth due to a number of emerging factors such as growing interest in legalisation amongst numerous countries and the rise in cannabis use within the medical field.

New report

Another new report
by The Prohibition Partners predicts that the North American cannabis market
alone could be worth more than $47.3 billion annually by 2024.

The flourishing growth within the US
market will eclipse that of its neighbour Canada, despite the country becoming
the first G7 nation to legalise cannabis use for adults and cannabis remaining
federally illegal in the States.

Managing director at Prohibition
Partners – Daragh Anglim – sets his sights even higher predicting that “although
North America’s legal cannabis industry could be worth more than US$47.3
billion within the next five years, the true value of the market is likely
to be much larger than current estimates”.

The booming industry includes
everything from CBD products for an array of ailments and pains, medical grade
marijuana prescribed straight from doctors, and simple weed joints for
recreational use.

Currently, eleven out of fifty states
have legalised cannabis for recreational use for adults over the age of 21 and
33 states have legalised medical cannabis, the US clearly knows what its
citizens desire and require and is set to keep up with their demands for the
foreseeable future.

Market Drivers…

Pain
Management

The medical application of cannabis
has increased monumentally after being supported in a multitude of scientific
studies demonstrating the medical benefits in treating a variety of diseases.

As a result of this, medical cannabis
now holds the largest market share of 70.3% in 2018 and is expected to expand
at an annual growth rate of 24.1% from 2019 to 2025.

With the increasing burden of chronic
pain and disease on both medical facilities and prescribed pharmaceuticals,
alongside the need for more effective pain treatments, cannabis-based remedies
are expected to amplify the demand for legal cannabis.

An increase in prevalence of cancer, Parkinson’s disease, Alzheimer’s disease, arthritis along with numerous other conditions will drive demand and see an increase in medicinal usage by professional bodies in future years.

Medical benefits

The World Health Organisation shows
that cancer is the second leading cause of death globally, accounting for
approximately 9.6 million deaths in 2018. This demonstrates the necessity in
broadening scientific discoveries and usage for medical benefits.

In 2017, Oxford University and
Kingsley Capital Partners announced their partnership
for the development of cannabinoid use in treating cancer and inflammatory
diseases and is expected to have a positive impact on the medical cannabis
market.

Additionally, with the need for more
effective pain management alongside the growing
opioid epidemic
in the US as a result of
over-prescription of opioid based pharmaceuticals, an increase in use of
alternative medical cannabis that has proven to be potent as chronic pain
management treatment will see global demand grow.

Decrease
in the black market

Regulators will be glad to know that
the legalisation and decriminalisation of cannabis has led to a significant
decrease in the black market, as consumers turn to purchasing medical and
recreational weed through legal means instead.

Through legalisation and eradication
of the black market, many governments have been focusing on gaining the huge
amount of tax revenues that are collected on the sale of cannabis products

In 2019, it was recorded
that since the adult-use retail market of cannabis opened in November 2018, the
State of Washington experienced the highest estimated tax revenue and collected
around $319 million, closely followed by California where $300 million in tax
was acquired.

In addition to tax collected to be
redistributed within drug abuse programs, schools and medical research among
other departments, more than 211,000 American citizens were able to support
their families and communities through legal cannabis jobs.

There are now more legal cannabis industry workers than dental hygienists in the United States currently.

Massive exodus

However, in countries where
recreational cannabis has been legalised, there has been a ‘massive exodus’ of
patients that previously obtained their supply through medical prescriptions
then switching to purchase through recreational means.

This flood of patients moving away
from prescriptions can be attributed to the easy availability and lower prices
observed within recreational dispensaries along with the wide variety of
strains.

Robin Beverett – 47-year-old disabled
army veteran – ended up resorting
back to a powerful prescription medicine for her anxiety as a result of rising
medical cannabis prices after California began recreational sales, where an
eighth of an ounce of cannabis flower cost $35 before, to now being charged
almost $100.

Many medical cannabis card holders in
the US only obtained them in the first place as it was the only way to use
marijuana legally, therefore immediately after recreational use became legal
they were then discarded.

Expanding
product types

Cannabis products can be classified
into buds, oils and tinctures, with the buds segment holding a significant
amount of the market share with a value of 7.3 billion dollars and an expected
expansion at an annual growth rate of 20.6% from 2019 to 2025.

Buds primarily being used to smoke as
smoking cannabis can be applied to a variety of medicinal purposes and is more
economical than edibles or tinctures with a more rapid onset.

The demand for cannabis oil however
has seen significant growth due to stigma in regards to smoking, and to avoid
harmful issues as a result of inhaling the plant.

The prevalence of CBD products within the cannabis market has also influenced users to switch to the oil version, as many states now allow the use of the low THC compound and doctors would feel more comfortable prescribing oil to their patients instead of smokable buds, thus the oil segment will experience further growth in the future.

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