Legal Cannabis Sales Nearly Doubled From 2018 to 2019, Report Finds
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From 2018 to 2019, global legal cannabis sales grew by 46 percent up to US$14.8 billion, according to from the cannabis market research firm BDSA and its partner Arcview Market Research.
This growth – a significant increase from the 16 percent growth seen in 2018 – was largely driven by growing legal cannabis markets in Canada, California, and Massachusetts and expanding medical cannabis markets in Florida and Oklahoma, the analysts say.
Cannabis market growth in 2019
According to BDSA and Arcview, cannabis sales in the United States alone grew 37 percent year-over-year to reach US$12.4 billion in 2019, up from US$9.1 billion in 2018, contributing significantly to the worldwide increase.
“By relaxing product restrictions and adopting more of a free-market approach to licensing, states like Florida are realizing the potential of medical cannabis sales,” said Roy Bingham, co-founder and CEO at BDSA, in . “In addition, light regulation and low tax rates in states like Oklahoma enable citizen access, greater performance over the illicit markets, and a healthy tax revenue stream for the state.”
Outside of North America, 2019 also saw a dramatic increase in medical cannabis spending, soaring up 64 percent from US$446 million to US$732 million. This increase international spending, , was largely down to the expansion of medical cannabis programs in Germany, Australia, and Mexico.
New GDP data from also illustrates the growth seen in the cannabis market over 2019. From March 2019 to March 2020, country’s national statistics agency estimates that the cannabis industry’s contribution to Canada’s GDP grew from CAD$6.78 billion to CAD$8.16 billion.
In a further
, Statistics Canada reveals that the total legal cannabis industry in Canada contributed around CAD$3.96 billion to the national GDP as of February 2020 – an increase of 215 percent since the legalization of recreational cannabis in October 2018. Additionally, the contribution of the illicit cannabis market to the country’s GDP fell by 21 percent in the same timeframe, implying that legalization has been effective at chipping away at the black market.
Cannabis market could be worth US$47 billion by 2025
As well as analyzing the recent history of the global cannabis market, this latest BDSA and Arcview report goes further in offering future projections for the trajectory of the global cannabis sector.
The analysts’ initial forecast puts global cannabis sales at US$47 billion by the year 2025, representing a compound annual growth rate of around 21 percent compared with 2019 figures. Legal cannabis sales in the United States are predicted to account for 72 percent of this total figure, approaching around US$34 billion.
“The long-term sales growth outlook for the global legal cannabis markets remains exceptional with sustained average revenue growth of 21 percent projected through 2025,” said Bingham. “The cannabis industry may soon reach a watershed moment when US states, faced with a looming global recession, consider cannabis legalization as a new and potentially lucrative source of tax revenues.”
In the 2019 edition of the report, BDSA and Arcview analysts had predicted the global market to be worth US$40.6 billion by 2024. In this new report, they have revised this figure to US$42.7 billion. Policy changes in the Californian cannabis market and a slow start to legal adult-use cannabis sales in Canada caused these predictions to be too conservative, the analysts say.
Since then, strong 2019 financial figures from the markets in Florida, Massachusetts, and other similarly populous states have increased optimism over the extent to which the market could grow further in coming years.
Other cannabis market predictions
The current coronavirus pandemic has put the cannabis industry in a state of flux. While many regions have found the pandemic to dampen sales, others, such as Washington state, are experiencing their yet.
Some predict that the pandemic could prove to be , as legal cannabis may provide an alternative stream of tax revenue for governments as the world heads into a likely .
But at the same time, the effects of the pandemic are as lawmakers concentrate their efforts on coronavirus relief, and social distancing measures make it difficult for advocates to secure the signatures needed to have their cause appear on the ballot.
The BDSA and Arcview team behind the new report note that their long-term sales growth outlook remains unchanged in the context of the Covid-19 pandemic, and that a mid-year update to the report is scheduled to follow in August.