There has been much to read about cannabis in the media over the last few weeks. First, a billion-dollar merger caused a stir in the sector, then shortly afterwards the Reddit community discovered the drug made from hemp on its WallStreetBets forum. The Reddit crowd was inspired, among other factors, by the hope for changes in legislation under new US president Joe Biden. The most publicised share on the platform was Tilray, which saw its price more than double within a matter of days at the start of February. Speculation concerning the weed is just one side of the coin, however: the other is that the sector is maturing as legislation becomes increasingly progressive. The WHO, for one, recently removed cannabis from its list of the most dangerous drugs. Observers see this as a sign that hemp could be approved not only as a remedy, but also in ever more countries as a stimulant. Cannabis is already permitted for private consumption in both Canada and Uruguay, for instance.
Consumption for pleasure is far from being all that the millennia-old crop stands for, however: it also has a curative effect. Cannabis has a wide and varied spectrum, being used not only for many illnesses such as chronic pain and migraine, but also chemotherapies against cancer. The properties of hemp vary according to dosage, and it can have both a relaxing and an anti-inflammatory effect. In the USA especially, marijuana is already part and parcel of healthcare. After California became the first US state to allow its medicinal use, another 35 states have since come on board. Most recently, in November 2020 voters in Mississippi and South Dakota consented to a measure regulating the use of cannabis for medicinal purposes.
In total, more than one third of the population of the USA can now purchase cannabis perfectly legally. This is driving strong growth: according to forecasts, sales of pharmaceutical cannabis overseas will double to about USDbn 9.5 to 11.7 between 2019 and 2024. Indeed, the permitted leisure consumption for adults is expected to more than triple over this period. It is not only in the USA that cannabis is on the march, however: its – primarily medicinal – legalisation is increasing round the globe. Countries such as Argentina, Brazil, Canada, Chile, Colombia, the Czech Republic, Germany, Italy, Spain and the United Kingdom have already given their blessing to it. As a consequence, the global demand curve is pointing up. The market researchers of the IMARC Group anticipate that the worldwide volume will reach USDbn 44.4 in 2024. The experts also reckon on an average compound annual growth rate (CAGR) of 15.3% between 2021 and 2026.
Meanwhile, cannabis lovers are no longer restricted just to smoking joints: they are now also able to choose between an increasing array of products. Hemp flour, hemp oil and even hemp tea – the list of available products containing cannabidiol (CBD) or tetrahydrocannabinol (THC) is growing ever longer. The beverage industry in particular has discovered the plant for itself. Spirits producer Constellation Brands, for instance, is focusing fully on this trend, building up a stake of around 40% in cannabis specialist Canopy Growth over the last few years. Experts see great potential in the market: Fortune Business Insights assumes that the volume in the cannabis beverage sector will rise to USDbn 8.5 by 2027, corresponding to a CAGR of 50.9%. The trend could be given further momentum by the increasing distribution of grass in the relatively untapped "mainstream" consumer market in particular.
Source: Marijuana Business Factbook
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