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In 2017 And Beyond, U.S. Enjoys The Highest Legal Cannabis Market Share Worldwide

This article is more than 5 years old.

In their combined executive summary “The State of Legal Marijuana Markets, 6th Edition” (SOLMM), Arcview Market Research and BDS Analytics report, “Cannabis saw its first US$5-billion company in 2017, Canadian licensed producer Canopy Growth [CG].” Capitalized at that level, the company posted $54 million in cannabis revenue. It is no wonder the giant alcohol conglomerate Constellation Brands earlier invested $190.8 million in CG, an almost 10% stake in a company formed just four years ago.

The report states, “Legal adult-use sales will largely be a North American phenomenon,” and today the U.S. reigns in the legal cannabis market worldwide.

The SOLMM report claims the legal cannabis industry has been transformed dramatically since 2013; then, it was "medical-only" and was an under $3 billion industry. According to the report, since then “59 million adults in the United States have had their access to legal cannabis improved, either via voter initiative or, most recently in West Virginia, by legislative action.” 

Today, the U.S. is the epicenter of the legal cannabis market and it appears it will hold that position for the foreseeable future. In 2017 the worldwide legal marijuana trade grew by 37% and was worth $9.5 billion. At $8.5 billion, the U.S. accounted for 90% of it . At $0.6 billion Canada’s 2017 share was 6%. The rest of the world combined made up the remaining 4%. 

By 2022, legal cannabis revenue in the U.S. market is projected to hit $23.4 billion (73% of the market). During the same period, Canada is projected to reach $5.5 billion (17%) and at $3.1 billion, the rest of the world will represent almost 10% of the legal cannabis market. 

It appears recreational use will be the growth driver. The medical portion of the cannabis market was down from 100% of the market in 2013 to 71% in 2017; the SOLMM report expects it to “immediately plummet to 41% in 2018 as the Nevada, California, and Canada adult-use markets explode…” Medical marijuana’s share of worldwide legal sales is expected to be just 35% of the market in 2022. Behind this change, the report cites substantial growth not only in those three markets but as the result of no fewer than six U.S. states legalizing recreational marijuana over the next four years: Maine and Massachusetts already have approved; Arizona, Connecticut, Rhode Island, and Vermont are in waiting. 

The SOLMM recounts, “In October 2017, Gallup reported that a record 64% of Americans believe cannabis should be legalized.” This view prevails despite the federal government’s official classification of cannabis production and distribution as a felony. Although President Donald Trump has ordered Attorney General Jeff Sessions to halt his attack against legal cannabis among the states, and some Republican opponents of legalization have had a change of heart (Utah Senator Orrin Hatch and former Speaker of the House John Boehner), no one expects federal regulations to change anytime soon. 

Nevertheless, stock markets are responding. February 2018 saw the first Nasdaq listing of a company engaged in marijuana growing, Canada’s LP Cronos Group. One month later, the company joined the Los Angeles-based cannabis retailer, MedMen to brand products and open stores in Canada. 

Several billion dollars has been invested toward both plant-touching and ancillary companies in the hopes of a big payoff with an eventual end of federal prohibitions on the weed. The SOLMM report notes that in Canada, where recreational use is so near (this September), “…the cannabis-friendly Canadian Securities Exchange—the third largest Exchange in Canada after the Toronto Stock Exchange and the TSX Venture Exchange—lists about C$5 billion in cannabis related companies out of a total of nearly C$9 billion market capitalization in 354 companies.” Twenty-three of the companies are either U.S.-based or have U.S. holdings; they represent more than C$2 billion.

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