Global cannabis sales will grow from $30 billion last year to US$57 billion in 2026, according to a new update from the analytics firm BDSA.
On Tuesday, the new cannabis market forecast update was released by the firm and it covers a five-year global forecast by country, state, province, channel and category.
The update estimates a compound annual growth rate (CAGR) of around 13 per cent. It estimates that in the United States solely, pot sales will jump from US$25 billion in 2021 to US$42 billion in 2026, which makes up for 75 per cent of global sales.
Despite inflation and concerns about a recession, the firm says the legal cannabis market in the U.S. will thrive and reach US$27 billion by the end of the year. This is a 7 per cent jump from last year sales of US$25 million.
“The ‘hockey stick’ trend of sales growth seen in the early years of legal cannabis has passed, and economic and regulatory headwinds are exerting pressure on legal cannabis markets,” BDSA CEO Roy Bingham said.
“Still, our updated forecast predicts that steady gains in developing U.S. markets will continue to drive single-digit annual growth in total U.S. legal sales in 2022, with continued growth prospects out to 2026.”
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New markets will drive pot sales until 2026 as more states legalize its use
While sales in mature markets have plateaued, new markets such as the one in Illinois saw an increase of 14 per cent of sales this year compared to last year. These new markets will continue to drive sales until 2026 as the number of states with a legal use framework increases.
So far this year, New Jersey has legalized adult-use sales with New York expected to be next in line. The launch of both of these markets is expected to contribute around US$5 billion of the projected sales in 2026.
“Though mature legal cannabis markets in the U.S. saw sales soften in 2022, the cannabis market is still forecast to see topline growth in 2022, driven by strong sales in new and emerging markets, such as the populous states of New Jersey and New York,” explained Bingham.
“The U.S. will continue to dominate global sales over the next few years, but we see potential from emerging global markets such as Germany and Mexico.”
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Medical market sales are declining because of adult-use market legalization
Medical market sales are also changing as more accessible prices and more variety arises in the adult-use market. This trend has already been seen in states that recently passed adult-use legalization such as Arizona.
Since then, the firm predicts that Arizona will lose around 30 per cent of medical annual sales compared to last year and only half of sales seen in 2020 which was the last year of medical-only sales.
However, some markets like Colorado saw its medical cannabis sales grow after the launch of its adult-use market in 2014.
