The global legal cannabis market has grown to become a major industry and its outlook is as promising as ever due to some potentially upcoming tailwinds.
The United States has become the largest market in which this product has been legalised while other countries like Colombia have approved the use of cannabis and CBD-based products for medical and scientific purposes, leading other nations in the region to also embrace the legalisation trend.
Similarly, in the United Kingdom, the support shown by the population for the use of CBD-based products for medical purposes is quite high at 77%, with the value of the total market for medical cannabis in the country expected to reach $1.29 billion by the end of 2024.
Companies like Cannabotech are part of this growing market in the country, having established themselves as pioneers in the development of techniques for producing preventive care cannabis-based treatments by applying modern science to enhance the healing properties of this fascinating substance.
The cannabis and CBD market in numbers
By the end of 2019, the global legal cannabis market was valued at $12 billion while estimates see it growing to become a $55 billion behemoth by the end of 2025. However, for optimists and advocates of the widespread adoption of marijuana for both medicinal and recreational purposes, the market could reach a size of $160 billion if the illegal side of the market starts to move toward legalising its operations.
Even though both marijuana and hemp are considered the same genus (biological classification ranking), they are different in terms of their THC content as hemp is a low-THC plant while marijuana contains over 0.3 percent of THC.
Meanwhile, certain derived products have emerged from the cultivation of cannabis as is the case of CBD-based products, which are legal in the United Kingdom as long as they meet certain specific technical criteria like containing less than 0.2% of THC.
This particular market is growing at a fast pace in the country, with statistics pointing to as much as £690 million sold in CBD-based products during the twelve months ended on April 2021.
Globally, the market for cannabidiol (CBD) is expected to reach a value of $3.4 billion and it is forecasted to grow at a rate of 21.2% per year from 2021 to 2028 as per estimates from Grand View Research.
Meanwhile, oil, including CBD oil, is the most common product type, currently accounting for approximately 51.1% of the total revenues while edibles, vaporisers, and other similar products have started to gain traction in multiple corners of the world as well.
According to authorities within the United Kingdom including the Medicines & Healthcare Regulatory Agency (MHRA), CBD-based products are considered medicine. Some of the diseases whose symptoms or pathology can be treated with CBD-based products include the Lennox-Gastaut syndrome, the Dravet syndrome, and MS-related muscle spasticity. Additionally, CBD-based products can be prescribed as pain relievers for patients undergoing chemotherapy.
A closer look at the global CBD market
The global cannabis market is starting to mature although it remains highly fragmented. This means that there are still a significant number of small players struggling to establish their brands and products among consumers.
This elevated fragmentation is still occurring due to big companies still finding difficulties to produce sustainable profitability and revenue growth. For example, Canopy Growth, a publicly traded cannabis company with a market capitalisation of over $8 billion produced as much as $556 million in losses during the last quarter of its 2021 fiscal year while Aurora Cannabis, another industry giant, generated $131 million in losses during the same period.
Meanwhile, the CBD market remains an important segment of the medical-use cannabis industry, currently accounting for around 23% to 25% of the total market. Moving forward, both markets are expected to grow at similar rates but further research about the applications of CBD as a treatment for other diseases could lead to an acceleration in these forecasted growth rates.
For now, the market continues to consolidate and new displays and types of products continue to be presented to keep attracting consumers. At the moment, the most common presentations of cannabis-based products are oil, capsules, flowers, and edibles.