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Legal Weed Sales Projected To Grow 14% in 2023

March 15, 2023 Published by

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.

The post Legal Weed Sales Projected To Grow 14% in 2023 appeared first on High Times.

Malta Becomes First in the EU to Legalize Recreational Cannabis Use

December 15, 2021 Published by

In a sign that things are absolutely at a tipping point in Europe, the Mediterranean island of Malta became the first country in both Europe and the European Union (EU) to legalize recreational cannabis cultivation, possession and use. Luxembourg announced similar plans (and a similar model) about a month ago, but this will be (at least initially) limited to the public sale of seeds. 

While the bill still needs to be signed by the President, this is a small detail. In the words of the lawmaker who introduced the legislation into the Maltese Parliament, Owen Bonnici, this is in fact a “ground-breaking” moment. It also marks the first time a European legislative body has enacted recreational cannabis reform at a federal level. 

Despite a greater federal involvement in the regulation of the industry in Holland, even the Dutch have not gone this far. Switzerland is not in the EU.  Portugal and Germany are poised to move forward but have not yet. Luxembourg has come out of the shadows, but only to create a public seed market (for the time being).

Indeed, given the timing of such announcements, it is very likely that the Luxembourgian market and the Maltese one will develop along very similar timelines if not industry constructs.

The only difference of course is that in Malta, there is no grey area left. Cannabis specific outlets will be allowed to operate—albeit at a suitable distance from schools and youth centers.

Beyond this, consumers will be able to carry seven grams in public, grow up to four plants and keep up to 50 grams of cannabis at home.

The Birth of the European Recreational Cannabis Market

This development was only a matter of time. In the past months, recreational cannabis reform has been on the top of the docket all over Europe—even if not moving quite so quickly as in Malta. Most significantly, the new coalition government in Germany, Europe’s largest economy, has announced plans to legalize recreational use as early as next year. 

Luxembourg and Switzerland are both moving forward with limited trials. Portugal is also very likely to follow suit. Italy is also hovering around the edge of this question, with over half a million signatures gathered this summer to force the issue forward at the legislative level.

If there was a parallel, this is now a time very much like 2012 in the United States. Reform is now formally being accepted at a legislative level (although here it is at a sovereign rather than at the state level). In two years, there could be as many as five or six recreational reform states up and running.

What Does this Mean for the Industry?

Now is a very good time for American investors, in particular, to begin staking out a presence here. While flower and product cannot cross the Atlantic (at least not easily and without a few detours), investments can. The British are also circling. While reform has not (and probably will not come) as fast as it has on the continent, the equity markets in London are already a go-to place for those on the hunt for investment.

What has begun as a trickle this year is likely to become a veritable flood within the next six to 12 months.

German firms, particularly those who have managed to get into the medical space with an operational distribution license, have a clear advantage at the moment, across the region, simply because of the benefit of an early organizational head start.

Change at the EU Level

While such developments are clearly exciting, don’t expect all of this to be smooth sailing. There are still several big impediments that remain before the industry can operate more normally. While individual countries will begin to move in the recreational direction, the topic still needs to be addressed at a regional level. So far, the only place this has happened is with CBD (which still has not been adopted by many countries).

This will be an issue in (at least) the cross-border trade of cannabis—and for that reason, EU GMP is likely to play a much larger role, at least at first. German pharmaceutical specialty distributors will also have a clear advantage in the coming market—and not just in one country, but across the region.

Regardless, real cannabis change is finally coming. It just happened in Malta first.

And while it may still not make it into the top 10 most significant events in Maltese history, this development is certainly a marker of great change—and further, not limited to just this one, small European island.

The post Malta Becomes First in the EU to Legalize Recreational Cannabis Use appeared first on High Times.

New Jersey Lawmakers Double Cannabis Dispensary Licenses

December 9, 2021 Published by

Regulators in New Jersey on Tuesday moved to award 30 new licenses for new medical cannabis dispensaries, a significant expansion of a program that has seen slow growth.

The state’s Cannabis Regulatory Commission voted to “more than [double] the number of retail locations for a growing pool of patients who for years complained about long commutes to obtain legal cannabis,” NJ.com reported.

The regulatory panel distributed the 30 licenses evenly throughout the Garden State, awarding “10 each in the central, northern and southern regions of the state,” according to the website.

The expansion will result in a significant uptick to the 23 dispensaries currently serving patients throughout the state. Those stores serve “an average of 5,300 patients per retail site,” NJ.com reported, and there “are about 5,000 patients enrolling every month—a pace that has not abated even with the prospect of a legal market for adult users opening in 2022.”

In October, the New Jersey Cannabis Regulatory Commission “accepted the recommendation to approve 14 of the 2019 medicinal cannabis business applications that had been previously held up due to a court-ordered stay of the review process,” with “10 applications for cultivation permits and four applications for vertically integrated permits” approved to “begin preparations to serve New Jersey’s medicinal cannabis patients.” Due to increased patient need, “five more cultivation permits were awarded than had been planned in 2019,” the commission said.

“The current alternative treatment centers have not kept pace with patient need,” said Dianna Houenou, the chairwoman of the Cannabis Regulatory Commission. “We constantly hear from patients that prices are too high and that there are too few dispensaries with too few product options. The situation has not changed with the legalization of recreational cannabis. Our priority is to our patients and increasing the planned number of medicinal cannabis operators in the market will greatly benefit them.” 

Last year, New Jersey voters approved a constitutional amendment at the ballot legalizing recreational cannabis use for adults. NJ.com reported that while the 30 licenses approved on Tuesday are for medical cannabis dispensaries, if those businesses so choose, “they will have a head start in expanding their customer base to adults 21 and over once the legal market opens some time in 2022.”

Despite the voters’ approval of the amendment, “a bill outlining the legitimate market did not reach Governor Phil Murphy’s desk until February,” the website explained, and the commission “did not introduce the first round of regulations needed to run until August.”

The commission “will start accepting applications for the adult-use market from cultivators, manufacturers and testing labs for the recreational market on December 15, and from dispensaries on March 15,” according to the website.

In February, Murphy signed a bill officially ending the prohibition on pot in New Jersey.

“Our current marijuana prohibition laws have failed every test of social justice, which is why for years I’ve strongly supported the legalization of adult-use cannabis. Maintaining a status quo that allows tens of thousands, disproportionately people of color, to be arrested in New Jersey each year for low-level drug offenses is unjust and indefensible,” Murphy said in a statement after signing the legislation into law. 

“This November, New Jerseyans voted overwhelmingly in support of creating a well-regulated adult-use cannabis market. Although this process has taken longer than anticipated, I believe it is ending in the right place and will ultimately serve as a national model.”

The new law, Murphy said, “will establish an industry that brings equity and economic opportunity to our communities, while establishing minimum standards for safe products and allowing law enforcement to focus their resources on real public safety matters.”

The post New Jersey Lawmakers Double Cannabis Dispensary Licenses appeared first on High Times.