Cannabis- The last decade has seen a surge in the demand for legally available cannabis-based products and as a result, the market has boomed.
Early movers such as Columbia and Portugal continue to reap the first mover’s advantage and still yield a sizeable market share and the expanding cannabis market in Europe and the rest of the world is likely to continue their dominance over the segment.
Hemp Business Journal forecasts the CBD market to grow up to $2.1 billion in consumer sales by the end of 2020, with $450 million worth sales being attributed to hemp-based sources.
Such is the scope of growth in the market, Puerto Rico estimates hemp being cultivated on at least 10,000 acres in 2020. 33 states in the United States have legalized the use of cannabis for medical purposes while 10 of them explicitly have no objection to recreational use by adults. An estimated 250,000 jobs in the US alone are now associated with the cannabis-based products industry.
Cannabis and the US
Cannabis has fueled the national and international debate to the extent that US election hopefuls voiced their opinions on the matter. Amongst those most notably supporting Former Vice President and now Democratic Presidential nominee Joe Biden has stated that he favors the decriminalization of marijuana and would like the see the records of such felons expunged. A team of Senators lead by Sen Kamala Harris are lobbying for support of their Marijuana Justice Act, this law would quash previous marijuana-related convictions and would pave the way for future legal use across the United States.
Wait! What is Cannabis?
Cannabis is not only used for recreational purposes as was the case in the past but the discovery of Cannabidiol (CBD), a natural compound found in cannabis plants that is non-psychoactive i.e. doesn’t make its consumers ‘high’. This has resulted in CBD based products such as oils for muscle joints and pains, pills, creams and even gummies and lollipops with CBD extracts gaining popularity across the globe. Moreover, cannabis and its potential medicinal benefits are being increasingly explored and early researches suggest that cannabis helps battle depression and has also shown promise in the fight against cancer. Such is the hype the tobacco giant like Marlboro maker Altria Group (MO) has shown interest and has bought multibillion-dollar stakes in marijuana companies.
How HIGH are the Projections?
By 2026, it is projected the medical marijuana segment alone will be valued at $ 97.35 billion.
This is inspired by groups such as MedReleaf Corp., Cronos Group Inc., GW Pharmaceuticals, plc. and CannTrust Holdings Inc. investing heavily in the market segment. Increased demand for newer cannabis-based products is fueling this demand surge and in turn, is motivating investors to take note of this market segment. In March 2019, Altria Group committed $ 1.8 billion in Cronos Group Inc. The business aims to compete, scale, and lead the international global market and in doing so, establish a firm foothold in the market. Such a huge upfront equity boost will not only help the business but will also have a direct implication on the growth of the segment for years to come.
Even the coronavirus pandemic has failed the dampen the growth of the segment. After pot shops were declared as nonessential and shut down on orders of Governor Charlie Baker of Massachusetts, between March 23 to April 21; 7235 new patients were registered in the state gaining a permit to obtain marijuana under the state’s medical-marijuana program.
This is the record for most people registering under the program in a month and percentage terms a 245 percent growth compared to the previous 30 day period.
On top of this, gourmet cannabis and marijuana-themed cafes with pot featuring heavily amongst the recipes and coffee are beginning to crop up in the states that have legalized the use of cannabis. Such establishments are turning into popular tourist destinations.
