Banking & Finance

Cannabis Market Projections Are Rosy While Federal Legalization Remains In Limbo

Cannabis Market Projections Are Rosy While Federal Legalization Remains In Limbo

For the forecast period 2021-2026, the Global Medical Cannabis market report expects the medical cannabis market size to grow significantly. Their projections are based on revenue, market size, sales analysis, and key drivers. 

According to the report, analysts expect the global legal marijuana market to expand from 2021 to 2028 at a Compound Annual Growth Rate of 26.7%. Increased cannabis use for treating chronic diseases is a crucial factor driving the demand for legal marijuana, both medical and recreational.

In 2020, with a revenue share of more than 50%, the adult-use segment dominated the market. The increased demand among millennials and patients who don’t qualify for medical cannabis predicts continued expansion. 

The report remains cautious about the continuing effects that COVID-19 can have on the global economy – by affecting production and demand, by creating supply chain and market disturbance, and by its financial impact on firms and financial markets.

In the face of a global pandemic, disrupted supply chains, ballooning inflation, and continuing struggles to legalize marijuana federally, the US cannabis industry is thriving. Sales in 2020 reached $20 billion and should top $26 billion for 2021. By 2025, sales should hit $45.9 billion and escalate to $70.6 billion by 2028. At that point, the cannabis industry will have eclipsed the craft beer market.

Marijuana is entirely illegal in only four states (Idaho, Wyoming, Kansas, and South Carolina). Thirty-six states have legalized medical marijuana. Eighteen states have legalized recreational cannabis use. Others still have decriminalized the herb in various ways. Essentially, more Americans live in or near a state where marijuana is legal than not.

Some could claim the pandemic was a boon for the cannabis industry. A nation forced to stay at home, binge-watching TV, and dispensaries being declared essential businesses was the perfect storm to benefit marijuana. Sales accelerated at a record pace in multiple markets across the US – Colorado, Washington, and Oregon posted record sales in 2020.

According to a report released from Leafly and Whitney Economics, there were an estimated 321,000 full-time cannabis industry jobs in 2020, up from 234,700 the year before. Many want to leave what they feel are old, dying industries and to move into the modern realm of marijuana.

Karson Humiston is the CEO and founder of Vangst, which runs a cannabis industry-centric job recruiting site. “Now is the moment to get involved because it’s never going to be this small again,” said Humiston, as reported on by CNN.

The one notable negative is that the industry has grown less diverse over the last few years, and programs to address social equity or repair the damage from the “War on Drugs” are still in their nascent phase. To be sure, if these issues aren’t addressed correctly now, they might never be.

Challenges remain, however. The possibility of federal legalization seems paradoxically in and out of reach simultaneously. Despite many on Capitol Hill who advocate removing marijuana as a Schedule I drug, or for national banking and tax reform, change isn’t imminent.

“When you get to the point when half of the country has legalized for adult use, we have now set a stage for inevitability,” said Steven Hawkins, executive director of the Marijuana Policy Project and CEO of the US Cannabis Council, during an MJBizCon panel on federal legalization, per CNN. “And that begins to change the tone and tenor in Washington.”

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