Legal Cannabis Market

Market Overview:

The global legal cannabis market size reached US$ 20.7 Billion in 2022. Looking forward, IMARC Group expects the market to reach US$ 74.5 Billion by 2028, exhibiting a growth rate (CAGR) of 23.9% during 2023-2028. The increasing number of countries legalizing cannabis, the growing demand for high-quality, organic cannabis products, and the rising awareness among individuals about the medical benefits of legal cannabis, represent some of the key factors driving the industry.

Legal cannabis refers to the cultivation, sale, and use of cannabis products that are regulated by government authorities. Unlike illegal or black-market cannabis, legal cannabis operates within a framework of laws and regulations that govern everything from production and distribution to consumption and taxation. This form of cannabis can be used for various purposes, including medical, recreational, and industrial uses. For medical purposes, cannabis is used to treat conditions like chronic pain, epilepsy, and various mental health disorders such as anxiety and depression. Medical cannabis usually requires a prescription or medical card and may be regulated differently than recreational cannabis.

The growing trend of cannabis legalization and decriminalization across multiple countries is a major factor propelling market growth. Furthermore, international bodies are acknowledging the promising applications of cannabis and its derivatives. Notably, medications containing cannabidiol (CBD) have gained approval for treating rare, hard-to-manage epilepsy conditions like Lennox-Gastaut syndrome and Dravet syndrome. Oral cannabinoids have also shown efficacy in reducing chemotherapy-induced nausea and vomiting, as well as alleviating spasticity symptoms in individuals with multiple sclerosis (MS)-related spasticity. In addition, the number of medical cannabis dispensaries is also increasing globally, providing cannabis for medicinal purposes upon recommendations from certified healthcare providers. Moreover, the increasing research and clinical trials worldwide, coupled with rising public awareness of the medical advantages of legal cannabis, is positively impacting sales and profitability.

Legal Cannabis Market Trends/Drivers:

Increasing number of countries legalizing cannabis

As more nations embrace cannabis for medical and/or recreational use, the industry has witnessed substantial growth. This shift in legal status has led to an increase in demand for cannabis products, ranging from medical treatments to consumer goods. Moreover, the legalization of cannabis has opened new avenues for both local and international businesses. Entrepreneurs and investors are entering the legal cannabis industry, resulting in increased competition and innovation. This competitive landscape has led to improvements in product quality, variety, and accessibility. Besides, international agencies are recognizing potential opportunities that cannabis or cannabis-derived compounds may offer. They are also approving the use of a medication containing cannabidiol (CBD) to treat various diseases.

Growing demand for high-quality and organic cannabis products

Organic cannabis products are cultivated without the use of synthetic pesticides, herbicides, or chemical fertilizers. This approach resonates with health-conscious consumers who prioritize natural and chemical-free options. The trend toward wellness and a preference for products perceived as clean has prompted many individuals to seek out organic alternatives within the legal cannabis industry. Moreover, as the demand for high-quality, organic cannabis products continues to rise, businesses operating within the legal cannabis industry are recognizing the need to adapt and cater to this segment. Cultivators and manufacturers are exploring organic cultivation methods to meet the preferences of discerning consumers. Additionally, companies that emphasize their commitment to organic and sustainable practices are positioning themselves as thought leaders and experts within the market.

Rising awareness among individuals about the medical benefits of legal cannabis

As more people become aware of the medical uses of cannabis for treating conditions like chronic pain, epilepsy, and anxiety, demand for medical cannabis products grows. This surge in demand directly influences production levels and broadens the industry. In addition, awareness of specific medical benefits allows for more personalized treatments, encouraging the development of specialized cannabis products tailored for individual health needs. Moreover, the growing awareness and consequent market growth attract more investors, both individual and institutional, leading to better-funded research and development projects, representing another major growth-inducing factor.

Legal Cannabis Industry Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the global legal cannabis market report, along with forecasts at the global and regional levels for 2023-2028. Our report has categorized the market based on source, derivatives, distribution channel and end user.

Breakup by Source:

• Marijuana
• Hemp
   

Marijuana represents the most common source

The report has also provided a detailed breakup and analysis of market based on the source. This includes marijuana and hemp. According to the report, marijuana represented the largest segment.

Marijuana is used for both medical and recreational purposes, making it a well-known and widely accepted form of cannabis. Moreover, marijuana plants contain a wide range of cannabinoids, including THC and CBD, which are the primary compounds sought after for medical and recreational use. This diverse profile allows for a variety of products and applications. Besides, the majority of clinical studies and research on cannabis have focused on marijuana, increasing its medical credibility and escalating its demand in the industry. Moreover, the wide range of cannabinoids in marijuana enables manufacturers to create a broad spectrum of products, from oils and tinctures to edibles and vapes, offering more choices to consumers.

Breakup by Derivatives:

• Cannabidiol (CBD)
• Tetrahydrocannabinol (THC)
   

Cannabidiol (CBD) holds the largest market share

A detailed breakup and analysis of the market based on the derivatives has also been provided in the report. This includes cannabidiol (CBD) and tetrahydrocannabinol (THC). According to the report, cannabidiol accounted for the largest market share.

CBD is widely researched and used for various medical conditions, including anxiety, chronic pain, epilepsy, and sleep disorders. This broad range of applications makes it a go-to cannabis product for diverse health issues, thus driving its market demand. Moreover, unlike THC, another major cannabis compound, CBD does not produce psychoactive effects. This makes it more acceptable to a broader range of consumers, including those who are averse to the adverse effects associated with cannabis. Besides, CBD, particularly when derived from hemp, faces fewer legal barriers compared to other cannabis products. It is legal or decriminalized in many jurisdictions, making it more widely available and contributing to its large industry share.

Breakup by Distribution Channel:

• Recreational Stores
• Pharmacies
• Online Stores
• Others
   

Pharmacies currently dominate the market

The report has also provided a detailed breakup and analysis of market based on the distribution channel. This includes recreational stores, pharmacies, online stores, and others. According to the report, pharmacies accounted for the largest market share.

Pharmacies are accustomed to navigating stringent regulatory environments, making them well-suited to handle the complex legal landscape surrounding medical cannabis. Their existing infrastructure for ensuring compliance provides a secure channel for legal cannabis transactions. Moreover, existing pharmaceutical distribution networks offer an efficient path for medical cannabis products to reach consumers. These sophisticated supply chains make it easier to control inventory, reduce costs, and ensure product quality. Besides, pharmacies are generally more widespread and easily accessible than specialized dispensaries, especially in smaller towns and rural areas, making them a more convenient option for many consumers.

Breakup by End User:

• Medical Use
• Recreational Use
• Industrial Use
   

Medical use represents the leading end user

The report has also provided a detailed breakup and analysis of market based on the distribution channel. This includes medical use, recreational use, and industrial use. According to the report, medical use accounted for the largest market share.

Medical cannabis often gains legalization before recreational use, as it is easier to regulate and control and regulatory bodies are generally more willing to sanction cannabis for medical purposes due to its therapeutic benefits. Moreover, the medical efficacy of cannabis is increasingly supported by scientific research. Studies have shown that it can be effective in treating conditions like epilepsy, chronic pain, and anxiety disorders, lending credibility and driving demand in the medical sector. Besides, as the medical community becomes more familiar with the benefits of cannabis, healthcare providers are recommending it as a treatment option. This endorsement gives a significant boost to the medical cannabis industry.

Breakup by Region:

• North America
• Asia-Pacific
• Europe
• Latin America
• Middle East and Africa
   

North America exhibits a clear dominance in the market

The report has also provided a comprehensive analysis of all the major regional markets, which include North America, Asia Pacific, Europe, Latin America, and the Middle East and Africa. According to the report, North America accounted for the largest market share.

Both the United States and Canada have developed comprehensive regulations governing the cultivation, sale, and use of legal cannabis. This robust legal framework has helped legitimize the industry, making it more attractive for both consumers and investors. Moreover, high levels of awareness about the benefits of medical cannabis and a cultural shift toward its acceptance have driven demand in the North American market. Besides, the region is home to extensive research initiatives exploring the medical applications of cannabis, supported by both private and public funding. This research has contributed to product development and has lent credibility to the industry. Moreover, the well-developed retail infrastructure, including online and offline dispensaries, ensures easy accessibility for consumers, thereby boosting sales.

Competitive Landscape:

The competitive landscape of the market is characterized by a dynamic interplay of established players and innovative startups. Nowadays, leading companies are introducing new and diverse product ranges, from edibles to tinctures and topicals, to meet evolving consumer demands and to differentiate themselves from competitors. They are also investing in advanced quality control measures, such as third-party testing, to ensure product safety and efficacy. Besides, companies are increasingly leveraging online platforms for sales and marketing as a strong digital presence can significantly boost brand visibility and consumer reach. Moreover, key players are creating educational content, leveraging social media for brand building, and focusing on customer service to foster a loyal customer base, which is vital for market sustainability.

The market research report has provided a comprehensive analysis of the competitive landscape in the market. Detailed profiles of all major companies have also been provided. Some of the key players in the market include:

• Aurora Cannabis Inc.
• Cannabis Sativa Inc.
• Canopy Growth Corporation
• Green Thumb Industries
• GW Pharmaceuticals plc (Jazz Pharmaceuticals plc)
• HEXO Corp.
• Organigram Holdings Inc.
• Sundial Growers Inc.
• The Cronos Group
• The Green Organic Dutchman Holdings Ltd.
• The Scotts Miracle-Gro Company
• Tilray
• VIVO Cannabis Inc.

Recent Developments:

• Green Thumb Industries has been expanding its footprint in the United States, particularly in states where cannabis is legal. They have been opening new dispensaries and increasing their production capacity to meet the growing demand for cannabis products.
• Tilray, a global cannabis company, has recently launched a range of medical cannabis products, including oils, capsules, and topicals. They have also expanded their distribution network to reach more patients.
• Cronos Group has made recent launches in the cannabis vape market. They have introduced a variety of vape pens and cartridges, targeting both recreational and medical cannabis users.

Legal Cannabis Market Report Scope:

Key Benefits for Stakeholders:

• IMARC’s industry report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the legal cannabis market from 2017-2028.
• The research report provides the latest information on the market drivers, challenges, and opportunities in the global legal cannabis market.
• The study maps the leading, as well as the fastest-growing, regional markets.
• Porter's five forces analysis assist stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the legal cannabis industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.