Gen Z consumers and women will spearhead the growth of the global cannabis market which is set to reach US$82.3 billion by 2027, according to the research firm ReportLinker.
On Thursday, the firm released the report “Cannabis market by product type, compound, application, and region – global forecast to 2027” which analyzes the industry’s growth and future financial projections and found that the industry is proliferating and witnessing a double-digit growth rate.
According to the firm, the global cannabis market this year is set to reach US$27.7 billion.
The growth is due to increased adult use of cannabis driven mainly by Gen Z consumers while also inviting other new consumers such as women thanks to the shifting of public opinion around its use which is expected to increase over time.
Legalization has also led to more cannabis tourism and new marketing techniques such as novel holiday items which entice consumers to continue to drive the growth of the industry. More states are legalizing the plant’s use such as Virginia in 2021, Rhode Island in 2022 as well as countries such as Malta which legalized it in 2021 and Thailand in 2018.
The report also found that the THC-dominant segment will have the largest share in the market as it is used in both –recreational and medical– markets while other segments such as the delta-8-THC market are gaining popularity.
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Europe set to have the highest CAGR during the forecast period
The European market will be driven by the increased awareness of the medical cannabis market and healthcare systems that cover all patient expenditures in certain regions.
“As the legalization of cannabis in European countries is at a nascent stage, this creates a considerable opportunity for companies to establish themselves in the region,” reads the report.
Since 2019, the European market has seen mergers and acquisitions by medical cannabis companies such as the 2021 acquisition by the medical cannabis firm GW Pharmaceutical was acquired by Jazz Pharmaceutical for US$6.15 Billion.
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According to the report, several major companies dominate the global pot market and are trying to gain and expand their market share.
“The leading players in the cannabis market and medical industry are undertaking inorganic growth strategies, such as expansions & investments and acquisitions—to increase their profits and market shares,” reads a statement by the analytics firm.
In May 2020, Aurora Cannabis Inc. (NASDAQ: ACB) (TSX: ACB) acquired Reliva LLC (US) which sells CBD products in the United States. The acquisition took place for USD$40 million of Aurora’s common shares. This acquisition would enable the company to strengthen its position in the market and increase profitability.
According to the report the leading players in the industry include Canopy Growth Corporation (TSX: WEED) (NASDAQ: CGC), Aurora, Medmen Enterprise Inc. (OTCMKTS:MMNFF), Tilray Inc. (TLRY:NASDAQ), Unrivaled Brand Inc. (OTCMKTS:UNRV), VIVO Cannabis Inc. (TSX:VIVO), The Cronos Group (NASDAQ: CRON), Medical Marijuana Inc. (MJNA:OTCPK), Stenocare, Trulieve Cannabis Corp. (OTC:TCNNF), Organigram Holding Inc. (NASDAQ:OGI), Cresco Labs, Maricann Group Inc., Indiva Limited (TSXV: NDVA) (OTCQX: NDVAF), Limited Hexo Corp. (TSE:HEXO) and Ecofibre Limited.
