- While cannabis is still in the infancy stages of research, it has been used to address a number of ailments in medical patients.
- Cannabis’ discovery of CBD sparked the search and medicinal use of the CBG cannabinoid and other lesser-known cannabinoids.
- The Farm Bill caused a growing demand for cannabis, with many regions of the country legalizing the consumption of certain cannabis compounds, with many others following suit.
- The boom in recreational cannabis consumption in late 2018 has created a fast-growing concentrate market, now being just as robust as the ever-popular flower market.
Considering the cannabis black market successfully reigned in underground transactions for many decades, it is no wonder legalization in many parts of the world produced a profitable trade arena in this emerging industry.
As some US states and other countries began adapting legal protocol for the sale of medical marijuana and eventually for recreational use, savvy business entrepreneurs began seeing the potential for this new ‘Green Rush.’
In fact, with just over a decade of partial legalization, the global marijuana market size exploded in 2020 with a whooping value of 9.1 billion USD. And according to industry predictions, the future of the cannabis retail market is poised to continue its rapid acceleration in the coming years. The report mentioned above estimates an annual compound growth rate of 26.7% for the next seven years.
The many factors driving this nascent industry boil down to consumer demand for plant-based holistic medicine, unencumbered recreational use, and, not surprisingly, corporate money backing. Additionally, science and technology contributions are opening doors for research into the cannabis plant’s beneficial contributions, cultivation techniques, and extraction methods.
As legalization continues to unfold throughout the world, the possibility of exponential growth in this budding market shows no signs of slowing down. Looking ahead, the spotlight on cannabis is shining brightly for retail markets.
Legalizing Medical Marijuana
When California became the first US state to legalize medical marijuana in 1996, retail medical dispensaries began offering cannabis medications, usually prescribed through an onsite health provider. As the medical marijuana movement gained traction in other states and countries in the following years, consumer demand accelerated retail profits.
Considering research into cannabinoids and their effects on the human body’s endocannabinoid system had yet to be deeply researched due to legality issues, the young industry forged ahead, helping patients with both chronic and acute disorders.
However, within a few short years, medical scientists delved deeper into researching the mysterious plant and its healing properties. The discovery of the medicinal contributions of CBD, CBG, and other non-psychoactive cannabinoids became a game-changer for the cannabis industry.
When the US legalized hemp with the passage of the 2018 Farm Bill, the CBD market brandished into all corners of the industry. As the rest of the world joined in the newly recognized component of the cannabis industry, retail sales in the CBD market skyrocketed. In fact, the global cannabidiol market boasted a value of 2.8 billion USD in 2020 with an expected compounded annual growth rate (CAGR) of 21.2% in the next seven years.
As research continues to uncover the medicinal benefits derived from cannabis, the opportunity for growth in the retail medical marijuana market is expected to continue rapid acceleration.
Colorado and Washington were the first two US states to legalize recreational marijuana in 2012. As they began establishing legislation for this wild-west industry, folks from far and wide began pouring into the states, setting the stage for profitable ventures.
Their success also helped pave the way for other states to follow in their footsteps. Currently, eighteen states, two territories, and the District of Columbia have legalized the sale of cannabis for adult use in the United States.
Canada became a big-game player in the recreational sector when the country nationally legalized marijuana in 2018 for adult use. The government entity, Health Canada, oversees operations controlling many provincial-appointed dispensaries, however, privatized cannabis businesses also thrive in this lucrative industry.
Initial recreational sales in Canada began in October 2018 with a modest revenue of 153 million CAD in a short time. Two years later, though, legal adult-use sales topped off at 2.6 billion Canadian dollars by the end of 2020.
After the Covid-19 pandemic forced lockdowns around the world, quick-thinking retail cannabis business owners turned to online ordering, curbside pickup, and weed delivery services to get products to consumers. This creative avenue in retail cannabis distribution is undoubtedly the new normal in boosting sales in the future.
The Green Rush that began less than a decade ago in the cannabis recreational sector now boasts profits of 54% of the worldwide total revenue market sales in 2020. As consumer demand for the intoxicating effects from THC continues to drive sales in the adult-use retail market, estimated revenues in the future project exponential growth in recreational transactions.
The Concentrate Culture
While cannabis flower sales drove the market for many years, recent developments in extraction processes brought forth a new culture in the industry.
Potent THC products in the forms of waxes, budder, shatter, and crumble create a captivating segment in recreational sales as consumers seek the euphoric effects of the mighty cannabinoid. Dabbing and vaping have become the newest rave in cannabis lingo as this industry sector continues to grow.
In addition, the medical marijuana industry continues to discover the health benefits from the intriguing plant. Extracting CBD, CBG, and other beneficial cannabinoids into oils produces holistic remedies to treat many disorders. Tinctures, edibles, and salves infused with effective CBD oils help combat medical issues such as pain relief, inflammation, and vomiting.
Moreover, medical patients often prefer oil-infused products over smoking flower as a healthier alternative. Children with debilitating epilepsy seizures, in particular, cannot inhale cannabis due to the severity of the disease, but they often experience immediate relief from tinctures or edibles.
The concentrate sector of the retail cannabis market experienced a 51% revenue share in 2020 as the fastest-growing segment in the industry. This explosion in sales leads to evidence as to where this exciting avenue of the industry is headed – nowhere but up.
The Future is Looking Good
As technology and science continue to merge in the evolving cannabis industry, the possibilities for rapid growth appear to be endless. Add to that, futuristic advancements in cultivation practices, harvesting, and solventless extraction processes using Artificial Intelligence (AI) and robotics will pave the way for more efficient procedures.
For those on the retail side of the cannabis industry in both recreational and medical use, the forecast to experience exponential growth in the years ahead is undoubtedly looking quite favorable.