The global cannabis market is projected to see growth in the next five years, with the US showing substantial cannabis sales growth despite the financial crisis plaguing the country and the rest of the world.
According to Benzinga, an update of the cannabis market forecast was recently announced by BDSA. Its cannabis market forecast is a five-year rolling global forecast by country, state, state, channel, and category. The report predicts that annual global cannabis sales will rise from $30 billion in 2021 to $57 billion in 2026.
Projections Improve Despite Global Financial Crises
Central banks worldwide have increased their interest rates in response to inflation. A comprehensive new study by the World Bank reveals that the world might be facing the possibility of a Global recession in 2023 and a string of financial crises in emerging markets and developing economies that could have a lasting effect.
Despite the rise of inflation and the risk of recession, the United States cannabis sales are projected to grow from $25 billion in 2021 to $42 billion in 2026, making up 75% of the total global cannabis sales. The report further states that even with a decrease in customer spending, legal cannabis sales in the US will still reach $27 billion by the end of 2022, a jump of 7% over 2021 sales of $25 billion.
Roy Bingham, CEO of BDSA, told Benzinga, “The US cannabis market is projected to continue seeing steady growth over the next few years, driven largely by the opening of new and emerging adult-use markets.”In today’s inflationary environment, competition for pricing and supply is expected to intensify as adoption rates in established markets begin to decline. He further spoke about how global emerging markets also showed potential for growth as consumer awareness and adaptation increases for medical and recreation use.
Projections Continue To Improve Amidst All The Challenges Cannabis Businesses Face
According to Global News Wire, adjustments to the market forecast were made partly because the erosion of price in environments continued with high retail per capita numbers. To combat the chronic oversupply, Oregon and Washington state governments have declared moratoriums on new licensing, among other things.
In some of the most mature markets like California, Colorado, Washington and Oregon, sales have decreased due to declines in retail prices and a challenging macroeconomic situation. However, new markets continue to see brisk growth. A good example is the Illinois market: it is expected to bring in approximately $2 billion in total sales in 2022, a 14% increase over 2021 sales.
BDSA warned that most mature markets could face saturated consumer penetration, with data reporting that adult adoption in fully legal markets exceeded 50% in the past six months. New emerging markets such as New Jersey and New York are projected to contribute the most growth to the cannabis market in 2022, driven by consistently strong sales. Bingham also listed Germany and Mexico as showing potential to dominate the global market.
BDSA noted that accessibility to the increasing variety and lower prices in the market is affecting sales in the medical markets. For example, following the passing of adult-use legalization in Arizona, medical sales have declined.
Cannabis sales growth projections continue to improve regardless of the hurdles people operating in the cannabis industry must overcome.
The global cannabis market continues to see growth, with the US dominating cannabis sales. Factors such as the financial crisis, risk of global recession and challenges in the cannabis industry itself seem to scarcely impact the projections of the market’s growth. Enjoyed that first hit? Come chill with us every week at the Friday Sesh for a freshly packed bowl of the week’s best cannabis news!