Industry insiders have offered a wide range of estimates for the total value of the global cannabis market, including Bank of America’s calculation that the legal and illicit markets are currently worth US$166 billion combined. But two leading cannabis research firms estimate legal sales will reach US$40.6 billion worldwide by 2024 as legalization sweeps across new jurisdictions around and overtakes a larger portion of black market sales.
BDS Analytics and Arcview Market Research released their latest “State of Legal Cannabis Markets” report last month. The two research groups estimate the cannabis industry is on track to reach global sales of US$14.9 billion this year, a 38 per cent jump over 2018 when sales reached US$12.2 billion.
According to that estimate along with Bank of America’s calculation, it leaves over US$150 billion of potential market share for cannabis companies to snatch up.
By 2024, BDS Analytics and Arcview expect global cannabis sales to reach the US$40.6 billion mark as regulated markets improve and more countries and U.S. states legalize the drug. One of the boldest predictions the companies made is medical marijuana will be legal in all 50 U.S. states by then. And states with legal recreational cannabis, they expect that number to reach 20.
CBD market now tracked by BDS and Arcview
As Mugglehead reported earlier, the two research firms tallied the Total Cannabinoid Market (TCM) for the first time in its annual report. The TCM includes all sales from dispensaries, hemp-based CBD products, and FDA-approved pharmaceuticals. The companies note the 2018 U.S. Farm Bill proved to a big turning point for including the new CBD segment into the TCM.
These decisions being made at the federal level put pharmacies and general retailers in the business of selling CBD-based products in all 50 states, which substantially boosted the TCM
According to the report, sales of all CBD products in the U.S. are expected to reach US$20 billion by 2024, which will boost the TCM to US$44.8 billion in world’s largest market for cannabis. The bold estimate calls into question whether companies might be better off focusing on CBD rather than THC products.
Why the black market is not in danger of disappearing anytime soon
Although there’ significant growth expected for the cannabis industry, the underground is still expected to play a big role. According to Tom Adams of BDS Analytics:
Pricing in the legal market is a problem for many consumers, especially for those that don’t live in Oregon. And with the maze of red tape in the industry, it’s going to give the black market some big advantages over the legal market. Ultimately, it comes down to a balance the government needs to find between safety and allowing the market to grow.