Legal Weed Sales Projected To Grow 14% in 2023

Sales of legal cannabis in the United States are projected to grow by 14% in 2023, according to a recent report from Colorado-based cannabis industry market analysis firm BDSA. In an updated five-year global legal cannabis market forecast, the company reports that global spending on legal cannabis increased by 4.8% to $32 billion in 2022. BDSA projects that the global cannabis market will see a compound annual growth rate (CAGR) of 13.2% from 2022 to 2027, resulting in a total worldwide regulated cannabis market size of $59.6 billion by 2027.

The U.S. legal cannabis market has shown significant growth across the industry as more and more states legalize adult-use cannabis and medical marijuana. And while the industry’s growth slowed in 2022 in response to market conditions including rising inflation and economic uncertainty, BDSA expects the U.S. legal weed market to again show significant growth this year, projecting a 14% increase in the market in 2023.

“Legal cannabis spending slowed significantly in 2022 due to rapid price declines across all markets,” Roy Bingham, co-founder and CEO of BDSA, said in a statement from the company. “Despite this, our updated forecast predicts strong growth in the U.S. driven by developing markets, particularly the adult-use markets of Missouri, New Jersey and New York.”

Currently, 21 states have legalized cannabis for adults, while 37 states, the District of Columbia and three U.S. territories have passed laws to legalize the medicinal use of marijuana. Additionally, 11 states permit the use of low-THC cannabis formulations for medicinal purposes. Only Idaho and Nebraska continue to prohibit all forms of cannabis. 

Some Mature Cannabis Markets Contracted In 2022

The U.S. cannabis market posted rapid growth during the height of the COVID-19 pandemic as lockdowns kept consumers home and dispensaries were designated as essential businesses in many states. But last year marked the first decline in overall cannabis spending in some mature cannabis markets in the United States. In the West, early cannabis policy reform adopters California, Colorado, Nevada and Oregon saw a combined drop in spending on legal adult-use cannabis of 16.5% in 2022, according to the updated report. BDSA expects most mature cannabis markets in the U.S. to return to positive growth in 2024, although more slowly through 2027 than in the years leading up to the pandemic. 

Newer legal cannabis markets showed strong growth in 2022, despite the decline seen in more mature markets. BDSA also projects new legal adult-use cannabis markets to launch by 2027, predicting a start of legal sales in Maryland in 2024 and in Florida and Ohio in 2025. The launch of new recreational marijuana cannabis markets is also possible in Minnesota and Hawaii by 2027, BDSA notes, but the company does not expect to see federal cannabis legalization during the five-year forecast period.

Brian Vicente, founding partner of the cannabis law firm Vicente LLP, agreed that emerging markets will help fuel the growth of the legal cannabis industry in the upcoming years.

 “The future remains bright for the cannabis industry in the United States. Despite a recent setback at the polls, with Oklahoma voters shooting down legalization this month, we are still seeing other domestic markets expand and commence sales,” Vicente wrote in an email. “This includes significant revenue growth in newly-legal cannabis markets like Missouri and New Jersey, and also emerging medical markets like Mississippi. With additional states like Florida and Ohio looking likely to legalize in the next several years, we can expect continued expansion in cannabis sales.”

By 2027, U.S. sales of adult-use cannabis are forecasted to contribute 78% of the total spending on legal cannabis worldwide, up from 64% in 2022. U.S. legal cannabis spending is expected to grow at a CAGR of 11.3%, from $26.1 billion in 2022 to $44.5 billion in 2027, with the industry’s growth driven primarily by the New York, Florida, New Jersey and California recreational marijuana markets. 

Globally, cannabis markets outside the U.S. and Canada are forecast to grow at a CAGR of 40% to $9.5 billion in 2027, up from $1.8 billion in 2022. BDSA forecasts the Canadian market will see overall growth of 12% this year, increasing to a $5.7 billion market by 2027 at a CAGR of 6.3%. New adult-use markets in Germany and Mexico are expected to be the primary drivers of global growth, while existing limited medical cannabis programs are expected to expand, particularly in the European Union and Latin America.

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How recreational access affects medical cannabis according to BDSA

BDSA’s latest report suggests that recreational cannabis access affects longer standing medical market. Access with a medical card encourages patients to buy heavily taxed adult-use cannabis. But is recreational access a benefit or hinderance on medical cannabis? Why patients move into rec markets This author asked Roy Bingham, BDSA’s CEO and co-founder, about the pros […]

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BDSA Report Projects $57 Billion in Global Cannabis Sales by 2026

A report published by the cannabis data company BDSA projects that by 2026, global cannabis sales will rise to $57 billion—an increase from the $30 billion of global cannabis sales collected in 2021. The “Global Market Forecast” was published on Sept. 13, and reviews expected milestones for the cannabis industry to hit within the next five years.

“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,” said BDSA CEO Roy Bingham in a press release. “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.”

The report also projects that in the U.S., sales will rise from $25 billion in 2021 to $42 billion in 2026, making up about 75% of total global cannabis sales.

BDSA addresses how mature cannabis market prices are experiencing historically low prices. According to the Colorado Department of Revenue, adult-use sales continue to drop. Recreational sales in June 2022 reached $127,157,358, compared to June 2021 which reached $152,719,813. Medical cannabis sales in Colorado also follow a similar dip compared to last year’s sales data.

However, BDSA adds that states such as Oregon and Washington have implemented moratoriums to prevent over supply. Newer markets such as Illinois are continuing to do well though, having collected $2 billion in total sales in 2022 so far (14% more than sales collected in 2021). The report notes that markets like New Jersey, which recently launched its adult-use program, and New York, which is preparing for recreational cannabis sales very soon, will be high contributors to sales in the U.S. by 2026.

Between New Jersey and New York, there are 22 million adults who are expected to contribute $5 billion to the total $42 billion expected to be collected 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,” Bingham said. “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.”

Medical cannabis sales continue to decline, especially in markets that recently legalized adult-use sales like Arizona. “BDSA projects annual dollar sales in Arizona’s medical channel will be 30% lower than the 2021 annual dollar sales total and roughly half the annual sales total seen in 2020—the last full year of medical-only sales,” BDSA states in a press release. “By contrast, the Colorado medical channel still saw modest growth in annual sales for roughly two years after the launch of its adult-use market in 2014.”

On an international scale, larger countries are continuing to ramp up their medical and or recreational cannabis programs. Germany recently hit a roadblock with the concern that an adult-use reform measure might be rejected by the European Union. Mexico decriminalized cannabis last summer, but adult-use cannabis has not yet been legalized. Smaller countries are beginning to take action, such as the U.S. Virgin Islands, which released a draft of medical cannabis rules in August. Bermuda, a territory of the United Kingdom, recently made plans to implement a legalization bill, but it was rejected by U.K. officials.

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