The legal cannabis industry is comprised of the production and sale of the cannabis plant and products derived from it. Many companies in this sector began in supplying the medical market when that was all that existed. The legal markets in Uruguay, Canada, Thailand and the United States have led to new companies as well as expansion of previously medical only suppliers. Some of the hottest growing product segments are vaping products, edible and beverage products, and CBD (a cannabis-derived, non-psychoactive chemical with reputed health and wellness benefits).
During the beginning of the COVID-19 outbreak, sales of cannabis products in the United States saw a large boost as consumers prepared for coming lockdowns. This demand has not been sustained and the industry in both the U.S. and Canada is facing serious headwinds due to oversupply. As a result of oversupply, prices for wholesale cannabis have plummeted and consolidation is likely as producers struggle to survive.
Legal adult-use cannabis sales in the United States reached 21.1 billion U.S. dollars in 2022. The market is expected to grow by an additional 20 percent in 2022 with new large East Coast markets in the United States like New Jersey and New York expected to contribute significantly to sales.
The adult-use market is forecast to grow further and reach over 37 billion dollars in value by 2026.
Flower, the raw, dried bud of the cannabis plant is what most people think of when they hear of cannabis. As such, this segment of the cannabis market has remained the most dominant. Sales of flower in the United States grew by 27 percent in 2021 and an additional 29 percent in 2022.
Other segments such as vapes and edibles saw similar levels of growth but none are expected to overtake the importance of flower in the near term.
Cannabidiol (CBD), a chemical of the cannabis plant without the psychoactive effect of producing a high in the user has been one of the fastest growing products to come out of the commercialization of cannabis. Sales exploded after the passing of the Farm Bill in 2018 which legalized the production of hemp but have recently cooled.
Worth 4.17 billion U.S. dollars in 2022, the market is expected to remain stagnant in the coming years as regulation from the FDA has not yet materialized.
Although the legal cannabis market is still in its infancy, there are several companies that have become standout leaders. The largest such company is Curaleaf, which produces cannabis products and operates dispensaries in the United States.
Although Curaleaf is headquartered Massachusetts and operates its dispensaries in the United States, the company’s stock is listed in Canada. This is because the company’s operations violate federal law, even if individual states allow it.
Cannabis is a genus of plants, some of which produce psychoactive effects when ingested and others which do not (hemp). The cannabis industry produces products from both types of plants.
The legal cannabis industry is made up of companies that sell unprocessed cannabis as well as products derived from the plant in countries that have removed legal barriers for sale. Because the first legal market in many countries was medical only, many companies started out focusing on that field and have since branched out to offer products to the recreational market as well.
Legalization of cannabis has given rise to a number of commercial products. There is of course plain dried flower, which is the traditional and still most common way to consume cannabis. Other growing segments are vaping, which involves heating the product to a level below combustion and edibles, which converts the cannabis into a form that can be swallowed by a consumer.