North America’s legal cannabis industry could be worth more than $47.3 (€43.23~) billion annually by 2024.
The North American Cannabis Report finds that despite Canada becoming the first G7 country to legalise adult-use cannabis, US cannabis market growth will greatly exceed its North American neighbour. Currently the most profitable industry in the world, the US, is expected to enjoy triple-digit growth by 2024, despite not having legalised cannabis on a federal scale.
The cannabis market report, published by Prohibition Partners, includes detailed market value forecasts, regulatory timeline analysis, consumption data, healthcare analyses and commercial opportunities across North America.
The report found that although the US is currently the most profitable cannabis industry in the world, the model is imperfect. The lack of legislative clarity at the federal level is disrupting a market that could be worth $44 (€40.20~) billion within the next five years
It also showed that in the US, medicinal cannabis is legal in 33 states, while adult-use cannabis is legal in 11 (and Washington DC). In the near-term, data suggests that value sales of medicinal cannabis will dwarf the recreational market, although this will fall to just over half of value sales by 2024.
Conflicting adult-use laws in the US are sending business out of state and regulators are keen to protect tax revenue are accelerating legislative change. As western countries experience a long-term decline in smoking and stagnation in alcohol consumption, big tobacco and drinks businesses are looking to boost growth by investing in the sector as exemplified by deals from Constellation Brands and Altria.
Other key findings in the cannabis market report showed that the North American cannabis consumer goods market is the most advanced in the world and 2019/20 will see an unprecedented expansion of CBD lifestyle products. Also, as European countries such as Luxembourg look set to legalise adult-use cannabis, North American brands are best-placed to take advantage of the potential of the untapped European market.
The cannabis market
Ahead of the launch of the report, Daragh Anglim, Managing Director at Prohibition Partners, said: “Although North America’s legal cannabis industry could be worth more than $47.3 billion within the next five years, the true value of the cannabis market is likely to be much larger than current estimates. This is because, contrary to the hopes of regulators, legalisation is unlikely to eradicate black market sales, particularly in Canada.
“In the US, the model is imperfect. The legal disconnect between federal and state, and between states themselves, presents significant challenges for businesses looking to mature a market with significant potential. Moreover, conflicting adult-use laws in the US are forcing businesses to move to neighbouring states. On a positive note this is fuelling momentum behind legislation as state regulators look to generate and protect tax revenues
“From an international perspective, in many ways the regulatory frameworks across Europe mirror the patchwork of legislation across the US. Europe, and indeed the world, will continue to monitor developments in North America closely”.