NEW analysis from Prohibition Partners on the trajectory of the cannabis industry predicts significant global growth over the coming years
The ‘The Global Cannabis Report: Second Edition’ estimates 2021 sales of CBD, medical and adult-use cannabis will hit $37.4bn and could rise by 220% to over $105bn by 2026.
Whilst acknowledging the uncertainties inherent in such forecasting it highlights the gathering global momentum behind cannabis.
Conor O’Brien, Prohibition Partner Analyst and report author, says: “As of late 2021, the full legalisation of cannabis seems an inevitability for most countries across the Americas and Europe, with a handful of countries in Africa and Asia-Pacific set to follow suit.
“The cannabis markets are growing at a pace not rivalled by any other Consumer Packaged Goods (CPG) industry, as the multi-billion dollar black market for cannabis and CBD gradually converts to legal regulated sales.
“As more and more countries liberalise cannabis, we are seeing the beginnings of a global industry, with production coming online in the cheaper and more climatically suited regions on and below the equator.”
Four Main Sections
Split into four sections the report takes a look at the major trends in legalisation and market development, informs with global market sizing projections to 2026, reviews key regional trends, and features interviews with market leaders.
It highlights the adult-use markets of Canada and the US as the most important – and largest – for cannabis sales.
The ‘known’ sales of adult-use cannabis grew by 70% in the United States from $7.6bn in 2019 to $12.9bn in 2020.
Canada sold just under $2bn worth of adult-use cannabis in 2020, an increase of over 50% on 2019.
The report goes on to say that the international markets including Germany, Israel and Australia will ‘develop considerably over the next five years’.
Adult-Use Sales In Europe
Prohibition Partners says it has ‘very conservatively; forecasted the European adult-use market over the next five years, primarily due to the ‘uncertainty of full legalisation across the main potential markets’.
It suggests a fully-legalised adult-use market in Germany could see sales of $2bn to $4bn a year, thereby rivalling the larger United States states.
As well as the adults trials in the Netherlands and Switzerland Prohibition Partners also predicts that the adult-use market in Portugal will be fully legalised late in 2022.
The report says: “This would contribute to an overall adult-use market in Europe of around $1bn by 2026, though full legalisation in any major country like Germany or the Netherlands could see sales many times larger than this.”
International Cannabis Markets
In 2022, Prohibition Partners expects to see the beginnings of the adult-use market in Mexico, making it the single largest market for adult-use cannabis by population with over 128 million inhabitants.
Israel will also legalise adult-use cannabis over the forecast period, with several bills currently making their way through the legislature, potentially coming into effect in late 2022.
Looking at cannabis cultivation the report highlights how the balance of production is shifting away from the traditional strongholds of Canada and the Netherlands to regions with more suitable warmer climates, and cheaper land and labour such as Latin America, the Mediterranean and Africa.
Capital, Covid & CBD
The report delves in to developments in the financing space highlighting how 2021 has been significant one for cannabis M&A with Jazz Pharmaceuticals acquisition of GW Pharmaceuticals for US$7.2bn being the largest cannabis transaction to date.
It highlights the rise of America’s multi-state operators saying these are ‘now the biggest and most profitable groups, posing a serious challenge to the Canadian giants who have dominated the international markets’.
While the COVID-19 lockdown period saw record-breaking sales of cannabis in multiple regions, legislative developments have been interrupted, bringing delays in the development of cannabis market value across the globe, it says.
The Global Cannabis Report 2021 estimates the CBD market will reach $9.7bn by 2026 and it goes on to examine the shifting dynamics in markets that transition from medical to recreational.
All To Play For
Mr O’Brien added: “It is all very much still to play for in the cannabis industry, and the real winners of the market may be yet to emerge, the formats which will be most popular are not yet set in stone, the regions which dominate production and those which are consuming the most are yet to be set in stone.
“Overall, the industry is poised for a very exciting 2022, with the spread of legalisation being followed by strong industry growth. Large benefits will be felt across justice, public health and the global economy.
“Huge opportunity is attended here by substantial risks, and with a changing legislative and regulatory landscape, operators need to have the best strategic intelligence at their disposal in order to compete and to best serve their consumers and cannabis patients
“This report is designed to assist business leaders, health professionals, investors and regulators with understanding and engaging with the nascent cannabis markets across the world.”
To secure a copy of the ‘The Global Cannabis Report: Second Edition’ please click here.
The report is sponsored by Always Pure Organics, Cantourage, Linnea, White Lion Holdings, CBDepot.eu and Village Farms.
