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Region : Global | Latest Update: Sep, 2019 | Published Date: Aug, 2019 | Report ID: FBI100219| Status : Published
The Global Cannabis/Marijuana Market was valued at USD 10.60 Billion in 2018 and is projected to reach USD 97.35 Billion by the end of 2026, exhibiting a CAGR of 32.92% in the forecast period (2019-2026).
Cannabis legalization is gaining momentum around the world. This momentum is driven primarily by the increasing recognition that may have a range of legitimate medicinal benefits and therapeutic applications. Cannabis is the most widely cultivated, trafficked, and consumed drug worldwide, according to the United Nations Office on Drugs and Crime (UNODC).
Cannabis is a genus of a flowering plant and its use dates back to thousands of years, with consumption-based on recognized and accepted therapeutic and medicinal benefits. The social and spiritual utilization of cannabis is also well-documented. Cannabis sativa, indica, and ruderalis are three dominant species. Most of the varieties grown today are hybrids that exhibit features of two or more of these principal species.
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The hemp with a negligible amount of psychotropic substances is majorly derived from Sativa family and finds extensive application in paper, textiles, biodegradable plastics, and fuel. It is also one of the fastest-growing agricultural crops, requiring little to no pesticides, less industrial processing post-harvest, and low overall environmental impact. Industrial hemp is farmable on most of the world’s agricultural land, with China, Canada, and France as some of the major exporters.
The scientific interest in cannabis began in 1940-1960s with the extraction of its active principles like tetrahydrocannabinol (THC), cannabidiol (CBD), and cannabinol, and “terpenes. The initial research in this area revealed an interesting fact that the human body naturally produces its cannabinoids and uses them to regulate homeostasis (a process by which biological systems tend to maintain internal stability, or balance). The human body actively regulates variables related to appetite, immune response, memory, mood, pain, sleep, and other functions by naturally creating compounds known as “endocannabinoids” and delivering them to these receptors.
Cannabis-based Consumables (Edibles and Topicals) – The Innovative Arm for Sustainable Market Growth
Cannabis consumer product companies and retailers are rapidly evolving to meet the needs of the “mainstream” consumer. the consumers are no longer limited to smoking flower with joints, pipes or bongs, but have their choice of an increasing variety of products, including concentrates, infused products, and topicals. Products coming to the market increasingly address the attributes demanded by the modern consumer—more considerable discretion, ease of use, product safety, and accurate dosing. To attract more mainstream customers, companies have responded to these demands with increasingly sophisticated packaging and advertising.
Product Differentiation and Availability - Key to Sucess for Cannabis-infused Edibles
Generally, the cannabis-infused edibles contain cannabinoids and other active compounds from the cannabis plant. Thus these edibles are either infused with concentrates or developed with other infused products, such as cannabis-infused butter. Candies, chocolates, and beverages remain popular cannabis-based edibles in the market. The onset of euphoric "high" effect by such edibles takes one to two hours, but the effect lasts longer than that resulting from inhaling smoke or vapor. Nonetheless, the product innovation and packaging-related modification are expected to play a pivotal role in boosting the sales sentiments of edibles and are projected to grow at the fastest rate during the forecast period (2019-2026).
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Topicals represent a minimal share of the cannabis application - lotions, lubricants, creams, etc. are generally infused with cannabis ingredients providing relief of muscle soreness, inflammation, headaches, and cramping.
Medicinal applications include incorporation of cannabinoids or cannabinoid-like compounds in pharmaceutical products. Sativex, Marinol, and Cesamet are some of the well-known cannabis-based drugs. Some of the documented and practiced applications in the medical sector are for the treatment of chronic pain, multiple sclerosis, treatment-resistant epilepsy, etc.
The health and wellness trend resonating in the global marketplace has facilitated the cannabis market and the utilization of Cannabidiol (CBD) in particular. There is a growing body of research that indicates the potential benefits of CBD in treating a variety of illnesses, including chronic pain, anxiety, epilepsy, cancer. One can also gauge the popularity of CBD-infused products from the four times higher search frequency of CBD as compared to THC, according to Google Trends.
Cannabis Flower/Bud - Majorly Consumed Type, Concentrates are Expected to Gain Traction in Foreseeable Future
Cannabis flower, or “bud,” is the most popular consumable product in the global marketplace. Typically a cannabis "bud" contains approximately 15% to 30% THC, about 0.1% to 1% CBD and nominal levels of other cannabinoids.
Cannabis-based concentrates (primarily includes include CO2 oil, butane hash oil or “BHO,” shatter, wax, live resin, budder, kief, ice water hash, and rosin) are a leading in global market, owing to the favourable demand dynamics, huge consumer's base, higher availability and penetration of such products especially among the western markets.
Cannabinoids boiling temperatures are lower than the temperature at which cannabis flower burns, this is the concept utilized in vaporizers, which are gaining rapid popularity - there are sophisticated vaporizers being developed to maintain temperatures which target the activation of specific cannabinoids. Concentrates are also witnessing more significant consumer's acceptance because of the general belief that vaporizing or ingesting concentrates are among the healthier methods of cannabis consumption than smoking. Moreover the level of THC that provides euphoric "high" in concentrates can exceed 80% in concentrates - such products have achieved diverse flavor profiles and formulations in addition to offering enhanced convenience and discreet consumption experience.
North America Cannabis Market is a Leading Region; Asia Pacific Market is projected to Witness Fastest Growth
The recreational legalization in the U.S. began in 2012 with Colorado and Washington becoming the first two states to legalize its recreational use. As of July 2019, Eleven states and the District of Columbia have legalized cannabis for recreational use. In the United States, all state medical cannabis laws recognized it as a form of therapy or medicine for medical conditions such as Alzheimer’s disease, anorexia, arthritis, chronic pain, epilepsy, post-traumatic stress disorder, and even for cancer. Canada has recently emerged as a flag-bearer country by playing a leading role in global legalization.
The legislative shift in U.S market following the passage of farm bill has made CBD derived from hemp plants is as legal in all 50 American states. The cosmetics markets of developed economies are inclining slowly towards the natural skincare ingredients with perceivable health benefits along with providing sophisticated and aesthetic appeal. The added advantage with CBD is that it is well-researched for topical applications.
North America Cannabis Market, 2018
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The recreational use of cannabis will be impacted by the commoditization and subsequent price parity of cannabis flower or "bud" in the legal and illegal market. The greater availability and mainstreaming of raw material supplies will ensure the parity in prices; it will also smoothen the transition of flower from the illegal market to legal trade. The associated taxes will also be crucial in channelizing the consumer's spending and advancements to the legal cannabis market. South American cannabis producers are expected to upscale their production amidst the robust demands in U.S., Canada, and European countries - this will result in further downward pricing pressure on cannabis flower, owing to the increasing imports both in retail and wholesale channels.
Highly Dynamic and Uncertain Market Conditions in Global Cannabis Market amidst Legality Concerns
The global Marijuana market remains highly competitive and robustly dynamic - new partnerships and expansions are underway as the wave of legalization spreads gradually across the globe. The recreational consumption is also expected to attain multi-faceted patterns among younger consumers that can take higher risks for trying out different forms and versions. Thus, the robustly expanding popularity of recreational cannabis utilization is creating a shift from flower/bud to more processed formats such as edibles, oils, and topical products and this has been appropriately reciprocated by key players in the market. From the cost perspective, there is a high level of variability in the prices of cannabis raw material based on the regulatory structures and the stage of each market’s maturation.
The perceivable and validation-based benefits with the consumption of cannabis and its essential role in therapeutic applications is a significant growth engine of the global cannabis market.
The medical use of cannabis is not a recent development; it is the recreational use that is touted to become a transformational development. The open and flexible regulatory framework, strong emphasis on education and de-stigmatization is expected to facilitate the sustainable sales of recreational cannabis in the foreseeable future.
One of the major arguments in favor of cannabis legalization is its comparison with more harmful substances such as tobacco and alcohol. Moreover, it has also been witnessed that the costs of enforcement of existing criminalization are very high and the state should instead tap into the revenues that can be realized by legalizing; the recreational utility is also believed to expand the horizon of medicinal benefits. The most significant onus for the cannabis market after the legalization is fully achieved in some of the major consuming countries, is to improve the quality standards of cultivation which have largely remain fragmented exhibiting a cottage industry structure.
The report provides qualitative and quantitative insights on the cannabis market and detailed analysis of market size and growth rate for all possible segments in the marijuana market. The market is segmented by type, application, and geography. Based on type, the global cannabis industry is categorized into flower/bud and concentrates. The global market is also segmented by application into Medical, Recreational (which further includes Edibles and Topicals) and Industrial Hemp. Geographically, the market is segmented into four major regions, which are North America, Europe, Asia Pacific, and Rest of the World.
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The regions are further categorized into countries. Along with this, the report provides an elaborative analysis of the market dynamics and competitive landscape. Various key insights provided in the report are the overview of related markets, recent industry developments such as mergers & acquisitions, the regulatory scenario in key countries, and key industry trends.