The leading provider of cannabis market intelligence, BDSA. recently released their updated five-year global legal marijuana market forecast, which saw global legal cannabis spending growing by an impressive 4.8 percent to $32 billion in 2022. Forecasts in the report further predict a compound annual growth rate (CAGR) of 13.2 percent from 2022 to 2027, resulting in a market size of $59.6 billion by 2027.
In spite of rising economic uncertainty and raging inflation, BDSA projects that legal cannabis sales will grow by 14 percent by the end of 2023.
Steep Increases For Legal Cannabis Sales
According to BDSA CEO, Roy Bingham, legal marijuana spending slowed substantially last year due to price declines across all markets. Despite this, Bingham said that their forecast showed a positive growth trajectory for legal cannabis, driven by developing markets, notably the adult-use markets in Missouri, New York, and New Jersey.
Additionally, four of the nation’s top five markets–Florida, Illinois, Massachusetts, and Michigan– are projected to see increases of a combined 9.5 percent in 2023, bolstering the market by nearly $770 million in new spending.
Although legal cannabis sales drew rapid growth in the thick of the pandemic, 2022 saw the market take on a more mature appearance and was marked by the first overall spending contractions in mature markets through the US. This saw the more mature adult markets of California, Colorado, Nevada, and Oregon suffer a cumulative spending decline of 16.5 percent.
While BDSA expects to see a return to growth in 2024, mature markets are projected to see a more gradual and slowed growth rate in the forecast period. Notably, however, several newer markets managed to accomplish expansion in 2022, with growth in emerging markets expected to be ramped up in years to come. States like New Jersey and Montana, which launched their adult-use sales last year, saw roughly 140 percent growth last year– while Missouri grew by 84 percent in its second year of medical-only sales.
A Boom In Emerging Cannabis Markets
Forecasts predict that by 2027, adult-use sales will contribute 78 percent of the total global legal marijuana spending– up from 64 percent last year. Legal cannabis spending is also expected to grow exponentially at a CAGR of 11.3 percent, from just $26.1 billion in 2022 to $44.5 billion in 2027. This growth would have been driven primarily by the New York, Florida, New Jersey, and California markets.
BDSA also forecasts the launch of several new adult-use markets by 2027, including those of Maryland and Oklahoma by 2024, and Florida and Ohio in 2025.
New adult-use markets emerging in Hawaii and Minnesota are also on the horizon. While BDSA does not expect comprehensive US federal regulation overhauls during the timeframe, they do acknowledge the possibility of partial reform, which includes cannabis banking, within the next few years.
Global Markets Under The Microscope
Worldwide, cannabis markets outside the US and Canada are forecasted to grow at a CAGR of 40 percent to $9.5 billion in 2027– up from $1.8 billion in 2022. BDSA further projects that the Canadian market will see an overall growth of 12 percent this year, becoming a $5.7 billion market by the end of the forecast period.
Further projections suggest that new adult-use markets and countries like Germany and Mexico are the main drivers of global market growth, with existing limited medical cannabis programs expected to expand, mainly with the EU and Latin America.
BDSA will go far to fully break down all the implications and projections of their new market forecast report in a webinar that will take place on March 7 at 11 am MT. The free-of-charge webinar will explore marijuana industry growth throughout the year 2022, and what the industry will look like come 2027, while also looking at the factors driving growth in the US and beyond. If you’d like to register to attend, visit the link here.
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