Prohibition Partners estimates that, in 2021, the global sales of CBD, medical and adult-use cannabis amounted to US$37 billion and could be worth more than US$102 billion by 2026.
As highlighted in The Global Cannabis Report: Second Edition, adult-use markets in the US and Canada remain the most important regions in the world for cannabis sales, but international markets including Germany, Israel and Australia will develop considerably over the next five years.
While the COVID-19 lockdown period saw record-breaking sales of cannabis in multiple regions, legislative developments have been interrupted, bringing delays in the development of cannabis market value across the globe.
Legalisation Trends
As of late 2021 only Uruguay, Canada and a handful of states in the US have fully legalised cannabis for adult-use, but these will be joined by several international markets soon. Mexico is primed for full legalisation of adult-use cannabis in 2022, while the Netherlands and Switzerland are preparing for legal pilot trials.
In November 2021, the coalition of parties set to lead the next German Government released a statement confirming that they have agreed to legalise the use and sales of adult-use cannabis in the country. This could signal the beginning of the largest cannabis industry outside of North America.
Medical cannabis and CBD are now legal, in some form, across most of North Ameri- ca, the European Union (EU) and the United Kingdom (UK), as well as Latin America; with Africa and Asia-Pacific lagging behind.
In December 2020, the United Nations (UN) recognised the potential medical utility and the safety of cannabis implicitly by removing it from Schedule IV of the Single Convention on Narcotic Drugs.
Market Realities
The large US multi-state-operators (MSOs) now rival large Canadian players for their size, and for the most part, exceed them in immediate financial performance. 2021 was a significant year for cannabis Mergers and Acquisitions (M&A) for example; the acquisition of GW Pharmaceuticals by Jazz Pharmaceuticals for US$7.2 billion on 2 May, the merging of Aphria and Tilray, and the recent acquisition of Harvest Health and Recreation by Trulieve for US$ 2.2 billion.
Investor sentiment was shaken during the lockdown of 2020, and while stock prices are down, capital raises are now on the rise once again.
Global Supply Chain
The balance of cannabis production is shifting away from the traditional strongholds of Canada and the Netherlands, with exports coming online from regions with warmer climates, cheaper land and labour; such as Latin America, the Mediterranean and Africa.
The most important import markets, including Germany and Israel, are currently engaging in domestic cultivation but it is yet to be seen how much future demand will be covered by this. Ancillary services such as technology, professional services, extraction, distribution, packaging and construction are becoming increasingly important, with multi-billion dollar valuations for several cannabis technology companies.
