CANNABIS MARKET REPORT
Cannabis Market Expected To Grow For Years Despite Setbacks
Sometimes the news and the industry chatter may lead you to believe that the cannabis market is all doom and gloom.
No sector has been able to avoid the market struggles of recent years. But that doesn't mean cannabis is in trouble.
Cannabis has been on the rise for several years now.
Recent analysis from several leading firms indicates market growth will continue for years.
Continued expansion should come thanks to growing consumer bases and innovative ways to enjoy cannabis.
With various consumer types creating demand for various products and experiences, ample opportunities exist for businesses nationwide, spanning an array of industries, from plant touching to ancillary products and services.
Current Market Size and Regulations
Cannabis reform continues to take shape across the United States.
As of April 2023, 38 States and Washington, DC have legalized medical cannabis.
As of July 2023, 23 States have legalized adult use cannabis. The District of Columbia also legalized adult use cannabis, but federal law has continually blocked its implementation.
A burgeoning international cannabis marketplace joins the growth of the US market. European nations Luxembourg and Malta open the doors for legalization in Germany. If regulations were to pass, it is expected that several other European nations would soon follow suit. Reform continues to take place in South America, Africa and Asia–with medical largely in focus.
Meanwhile, American cannabis continues to surge in various states.
Valued at $13.2 billion in 2022, Grand View Research projects that the American market will grow at a CAGR of 14.2% up to 2030.
Their report notes that a range of products, including food and beverages, cosmetics and pharmaceuticals, will support the growing cannabis market. Still, the industry must contend with regulators, including the US food and drug administration.
The Grand View findings join a list of cannabis research firms that project ongoing market growth.
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Marijuana Business Daily's annual Factbook report expects $100 billion to be added to the US economy this year thanks to cannabis. Analysts stated that for every $10 spent at dispensary locations, an additional $18 would go into the economy, with much of it benefiting the local level.
According to the report, the growth of retail sales will continue to aid in additional economic impact. The industry should generate over $38 billion in sales in 2024, resulting in an economic impact of $115.2 billion. By 2028, retail sales should reach nearly $57 billion, generating an additional $170.7 billion in economic impact.
The report notes that cannabis can create a positive ripple effect throughout the community, including sectors like:
- Jobs
- Real estate
- Manufacturing
- Retail
In other cases, cannabis is helping revive economic areas often overlooked by sectors facing little to no location restrictions. By setting up shop, they're helping inject revenue into towns desperately in need of income.
Data published this past June from BDSA further suggests that the market should continue to see upward momentum.
The firm projects that the cannabis market should grow another 12% by the end of this year, representing a $29.6 billion market value. The market should continue to grow through 2027, generating $45 billion in sales that year.
New Midwest and East Coast markets should help fuel market growth over the next five years, with Missouri, New Jersey and New York as primary states to watch.
Meanwhile, markets like Colorado and California, two states who have seen sales stagnate as market maturity has set in, should continue to generate significant sales through 2027.
Diverse Consumers
American adults are using cannabis in impressive numbers:
- 2023 industry analysis from New Frontier data revealed that 42% of American adults have used cannabis and plan to use it again.
- 37% of those polled are considered current consumers, while another 5% have not used cannabis in over a year but plan on using it at some point again.
- Only 13% of those polled say they never intend to use cannabis again. Meanwhile, another 30% said they never intend to use cannabis.
The findings also reveal cannabis consumption rates are increasing across the board. They include:
- 23% increase in lifetime consumption
- 118% increase in consumption within the past year
- 150% increase in consumption in the past month
- 238% increase in daily or almost daily consumption
The findings confirmed what many had long known: Cannabis consumers are a wide-ranging group of individuals, spanning age, gender, ethnicity, economic bracket and many other identifying factors.
With many using the plant for medical and recreational purposes, it is no surprise why this market continues to surge despite larger economic concerns looming.
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Product Diversity
New Frontier also delved into 2023 consumer and product trends.
Their report notes that operating a business in the industry is not easy. With its high barriers to entry, expensive licensing and strict regulations, struggles are common. However, companies can discover ways to thrive by staying current on market trends.
Key consumer trends include:
- Flower remains dominant as the top product pick. However, cannabis products continue to diversify to satisfy all corners of this diverse consuming population.
- Edibles continue to rise, with 20.7% of respondents saying they are their go-to consumption form in 2023. That figure marks a 4% increase from 2022's 16.6% figure.
- Pre-rolls remain popular. However, products like blunts did decline over the past year.
An interesting takeaway was the slight dip in higher potency products, including infused pre-rolls and concentrated oils for dabbing and vaping.
This trend leads to the belief that low-dose options are in demand. The notion seems to be supported by anecdotal feedback among casual and even industry consumers, who often call for "light cannabis" options.
With pushback against THC potency as a primary indicator of plant quality, many in the space advocate for lower-potency products with more robust plant profiles.
However, changing this sentiment among the consuming public may be difficult, as the report notes that prohibition may be leading consumers to equate potency with quality.
As such, the belief is that flower will continue to be consumers' preferred product of choice.
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Exciting Times Ahead In Cannabis
Cannabis is growing and will continue to grow in the coming years.
Markets are coming online, new products are becoming available and exciting avenues like consumption lounges are just beginning to take shape in some of the most popular markets of America.
The data shows that opportunity is for the taking if you can weather the storm. By understanding the trends and the data, we can best assess our company's and industry's direction.
Here's to a successful rest of 2023 and many more years to come!
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