High-THC Cannabis’s and Medical Cannabis’s Extraordinary Global Growth — Report

That’s the figure that New Frontier Data affixes to the industry in a new report that emphasizes the cannabis reforms happening in many nations. The evidence includes some eye-popping statistics from the report:

• Of that $23.7 billion global sales figure for 2020, the United States alone accounts for $20.3 billion.
• Sales in legal U.S. markets are predicted to exceed $50 billion by 2025.
• Global consumer spending on both legal and illegal high-THC cannabis was $415 billion ($USD) in 2020 and is forecast to grow to $496 billion by 2025.

Along with the figures in the report are descriptions of the trends fueling them. One is the growing research validating therapeutic applications of cannabis, which in turn is giving health practitioners more confidence to recommend them. Product innovation is another trend. So is the phenomenon of “canna-curious” consumers who, with the increase in social acceptance, are more likely to try these products.

Add to those trends the current 29 percent of leisure travelers expressing interest in combining cannabis with their travels, sparking “canna-tourism” and an increasing acceleration of the industry’s pace toward creating a mature, legal product landscape.

“Cannabis has undergone a sea change in liberalization, normalization, and commercialization,” since New Frontier Data’s last global report, writes Kacey Morrissey, senior analytics director for the company. She cites legal access, therapeutic value, and realization of the industry as catalyst for economic growth.

Yet despite the data in The Global Cannabis Report, which must be music to the ears of industry entrepreneurs, it does put the brakes on all-out optimism. “Given [the[ nascent but immature markets and how many foundational regulatory and supply chain structures need to be established, realizing the market’s full potential will be a high-risk, resource-intensive and time-consuming enterprise,” Morrissey writes.

The report’s results come from custom-built, predictive models for 23 regulated medical cannabis markets and six adult-use markets spanning 24 countries. Regulatory and consumer data from each country were used to refine five-year forecasts for domestic, legal, high-THC sales to patients and adults, the company notes.

Following are capsules of what the report had to say on a variety of topics.

Globally Speaking

Seventy countries worldwide have legalized some form of cannabis for medical use, with 26 providing medical patients with legal access to high-THC cannabis. Worldwide, 10 countries have legalized cannabis for adult-use, with six adopting a system for regulated distribution.

The $20.3 billion U.S. sales market for legal, high-THC in 2020 represents ten times the highest level of legal spending of any other legal country in the world. (The Canadian sales figure was $2 billion.) In fact, North America has the highest rate in the world for social acceptance for cannabis use and advanced consumer markets, the report says. Elsewhere, it cautions, “Legal sales of high-THC cannabis were markedly smaller” in 2020.

Germany, for example, which allows insurance reimbursements for medical cannabis, was next on the list (with $206.3 million) after North America and was described as having the biggest legal medical cannabis program in Europe.

On the other side of the Atlantic, Puerto Rico (treated in the report as its own country) popped up on the list of strong cannabis markets, at $145.5M. Israel was next, at $158.9M, then the Netherlands, at $108.4M, and Australia, at $89.6M.

Among the world’s regions and their share of the world market, Asia, at 45 percent, was the world’s largest, due to its geographic size, while North America (22 percent) and Europe (19 percent) followed.

Usage

According to New Frontier Data’s analysis, adult populations in North America –the report counts “adults” as being those age 15 and up – reported the highest usage rates. Oceania and Africa were next. Among the individual nations, Israel had the highest usage rate – with 27 percent of its population 15 and up reporting regular consumption. “That rate is significantly higher than any other country’s, well outpacing both Jamaica and the United States,” the report says.

In almost every country that New Frontier Data studied, usage in 2020 was higher than in 2019. The report suggested that greater confidence in cannabis’s safety, the addition of more young consumers – who tend to see cannabis as an analog or substitute to alcohol – and the availability of edibles for those who don’t want to smoke, are the reasons. The Covid pandemic is also cited as a reason for increased usage, as is the growing number of “legal” U.S. states.

Investments

Still another driver for 2020’s larger markets was the investment dollars flowing into those markets at “unprecedented levels,” the report said, adding that, “The first half of 2020 saw a record $7.9 billion in deals as investors plowed new capital into the industry.” There were more than a few “blockbuster deals” that year, the report said.

Medical Cannabis

Just as with the recreational markets, those supporting medical cannabis sales have also grown exponentially. The report points out that the global cannabis patient population increased from 2.3 million in 2017 to 4.4 million in 2020 and is predicted to reach 4.4 million by 2025.

When examined as a percentage of a jurisdiction’s population, medical cannabis was being used in Puerto Rico (again, not considered part of the U.S. by the report) by 3.93 percent of the population. Other leading jurisdictions included the United States, at 1.25 percent; Israel, 0.99 percent; and Canada, 0.82 percent.

Qualifying conditions for program entry, the availability of products and price competitiveness were listed as drivers. Puerto Rico for example has a variety of high-THC products at its dispensaries, plus a reciprocity program allows visitors from other jurisdictions to purchase those products.

Takeaways

Among the report’s key takeaways were:

• Given that $415 billion in global sales, “Cannabis already represents a market of global consequence,” the report says. Also, this sales figure is the “floor,” not the “ceiling,” the report says.
• Worldwide, one-third of nations have passed some form of legalization, but most programs are too restrictive to be considered operational high-THC markets.
• More than 4.4 million patients globally are registered in medical programs, with that number forecast to reach 7 million by 2025 despite limited physician education.
• “North America will remain the global epicenter of legal cannabis for the foreseeable future.”