A new report projects that the global recreational marijuana market will nearly double over the next four years, with legal sales of adult-use cannabis climbing to almost $50 billion per year by 2027. The report, from U.K.-based cannabis data, media and tech company Prohibition Partners, credits global momentum in cannabis reform and the opening of new recreational cannabis markets in Europe over the next three years as the prime drivers of the industry’s worldwide growth.
“North America remains the global powerhouse of legal cannabis, with strong state-by-state growth, promising regulatory reform and international isolationism in the US, while Canada’s strong international presence but challenging domestic environment persists,” Prohibition Partners wrote in the introduction to the new Global Cannabis Report. “Europe continues to be a somewhat fragmented and heavily regulated business environment, seeing steady growth concentrated in key countries, incremental but important progress on adult-use legalization, and ongoing legal confusion over CBD.”
The report, which was released last week, forecasts that global annual sales of recreational cannabis will total approximately $49.7 billion by 2027, nearly double the current $24.9 billion. The growth in recreational cannabis sales will be largely driven by continued policy reform in the United States and Europe.
North America will remain the global leader in worldwide adult-use cannabis sales, according to the report’s projections. Canada legalized cannabis for adults in 2018 and now has about 3,000 retail cannabis shops across the country. Overall sales of cannabis in Canada currently approach CAD 6 billion (about $4.5 billion), with 93% of the total representing recreational cannabis sales and the remaining 7% coming from sales of medical marijuana.
In the U.S., cannabis remains illegal at the federal level, but 24 states have legalized recreational marijuana and 38 states have legalized the medicinal use of cannabis. Legal sales of cannabis in the U.S. totaled about $26 billion in 2022, including $17 billion in recreational cannabis sales and almost $9 billion in sales of medical marijuana. Total sales in the U.S. are expected to reach $33 billion by 2027. When unregulated sales of weed are included in the total, the report pegs the entire U.S. cannabis market at approximately $100 billion on an annual basis.
Adult-Use Legalization Coming to Europe
In Europe, adult-use cannabis legalization is in its infancy, with Malta being the first country to legalize recreational marijuana, although only nonprofit cultivators and dispensers are currently allowed to operate in the Mediterranean island nation. Switzerland is currently conducting several recreational marijuana pilot programs, and the Netherlands has also pursued a research-based legalization plan. Germany is in the process of adopting an adult-use cannabis legalization plan, which could go into effect as early as next year.
Other regions of the world are also included in the expansion of the global cannabis market. Countries in Latin America and Africa are slowly moving toward becoming sources of supply for the growing global industry while keeping access for patients limited. Oceania continues to be a hotspot for growth in both imports and exports. The Asian market, however, remains “virtually untapped,” according to the report, with Thailand and Japan cited as notable exceptions.
Alex Khourdaji, senior analyst at Prohibition Partners and a co-author of the report, said that the worldwide cannabis industry made new strides over the past 12 months in both adult-use and medical markets and projected continued growth going into the new year.
“2023 has been a challenging but progressive year for the global cannabis industry. In Europe, we saw the first legal recreational cannabis sales with the pilot projects in Switzerland and the first recreational cannabis controlled supply chain sales in the Netherlands, as well as progress with Germany’s adult-use framework,” Khourdaji wrote in an email to High Times. “Globally, medical cannabis patient numbers have also been increasing.”
“In North America, the market continues to grow with US states such as Kentucky, Ohio and Minnesota opening their markets to either medical or recreational cannabis,” Khourdaji added. “We’ve also seen some progressive reform of cannabis policy globally, and advances in commercialization, setting solid foundations for a positive 2024 for the global cannabis industry.” (Full Story)