Prohibition Partners are proud to announce the publication of The Global Cannabis Report: 4th Edition.
The legal cannabis industry in each global region has recognisable patterns of development that characterise industry, regulatory and market activity. Over the past year, each region has generally followed a familiar path of development, without diverging significantly from patterns seen in previous years.
North America remains the global powerhouse of legal cannabis, with strong state-by-state growth, promising regulatory reform and international isolationism in the US, while Canada’s strong international presence but challenging domestic environment persists.
Europe continues to be a somewhat fragmented and heavily regulated business environment, seeing steady growth concentrated in key countries, incremental but important progress on adult-use legalisation, and ongoing legal confusion over CBD.
Latin America and Africa are moving slowly along the path of becoming sources of supply for the global industry, while keeping patient access limited. Oceania continues to be a hotspot for both imports and exports. Asia’s potential remains mostly untapped, apart from a handful of pioneering countries such as Thailand and Japan.
Despite the slow pace of change, the direction of progress is constant – facilitation of product access, integration of markets, growth of sales, standardisation of regulations, rising product quality, widening public support etc. This progress is present to greater or lesser degrees in each region, but the forward momentum in positive cannabis reform is consistent amongst them all.
Key Takeaways
North America
- Cannabis remains federally illegal in the U.S, however 38 states have legalised medical cannabis whereas 24 states have legalised it for adult-use.
- New proposed regulatory reforms in the U.S. such as the SAFER Banking Act, DOJ Safe Harbor Memo and a potential rescheduling of cannabis have the potential to significantly boost the growth of the country’s adult-use as well as medical cannabis markets.
- Canadian medical cannabis exports continue to grow, with sales reaching C$160 million for the fiscal year ending March 2023, with Australia, Israel and Germany being the top destinations respectively.
- Canadian adult-use cannabis spending per capita metrics continue to underperform those seen in the U.S., due to several factors including a larger illicit market, steeper taxes, marketing restrictions, packaging restrictions and THC limits on edibles.
Europe & Israel
- Europe’s adult-use industry is still in its very early stages. However, significant developments continue to be made on a consistent basis in various countries across the region. A small number of countries have reached advanced stages of developing systems for adult-use legalisation.
- Europe’s medical market continues to see strong growth concentrated in key countries, with steady growth elsewhere. Currently, 21 countries allow the use of medical cannabis for a range of conditions. Germany is the standout market, with over 250,000 patients prescribed medical cannabis treatment in 2023, and domestic sales comprising over 75% of the regional market.
- Israel’s medical cannabis market dwarfs any of the European markets, with a larger market size than the entirety of the European region in 2023.
- The European CBD industry is fragmented, with the legal stance of CBD in EU regulation (and most national regulations) not fully clarified, and with some developments at times threatening to limit the market at regional or national levels.
Oceania
- The cannabis industry in Oceania is developing quickly and the region already represents the third-largest medicinal cannabis market globally, after North America and Europe.
- Oceania has the potential in the coming years to become a major exporter of medical cannabis globally, and this is one of the primary goals of both regulators and industry in the region. Regulators are taking positive steps to encourage producers, and significant progress has already been made.
- There is growing support in Australia for regulatory progress on adult-use cannabis at the federal level, with the first cannabis legalisation bill being introduced to the parliament in August 2023.
LATAM
- Latin American countries are trying to gain and consolidate key positions in the global cannabis industry, while still needing to solve many supply chain, bureaucratic and political challenges.
- The region has several competitive advantages for becoming a major player in the global cannabis industry, but clearer seed-to-product regulatory pathways, access to capital, reduced red tape, and depoliticisation of the cannabis debate are prerequisites for success.
- The region’s largest market, Brazil, has experienced substantial medical cannabis consumption growth in the last few years, which continues today, with a 72.8% increase in import authorisations from September 2022 to September 2023.
Africa
- Africa’s commercial activity in hemp and medical cannabis markets remains fairly limited, with countries focusing on production for export markets. African countries including Lesotho, Malawi, South Africa and Uganda have successfully exported cannabis, with North Macedonia being a common destination.
- Lesotho is one of the most developed medical cannabis exporters in the region as companies operating with foreign capital have been able to build EU-GMP facilities and thus able to export medical cannabis to countries including Germany, North Macedonia, and Israel.
- Although Morocco is the largest illicit producer of cannabis resin and the country legalised medical cannabis back in 2021, the nation’s roll-out of a regulatory framework has not been well received by farmers. This is partially due to the bottlenecks associated with illicit organisations and the significant amount of capital needed to enter the legal market.
Asia
- Asia continues to be an ever-changing environment as regulatory changes and regional differences within countries concerning cannabis and hemp production and sales make it a difficult region for players to navigate and prosper.
- Thailand’s removal of cannabis and hemp from the Category 5 list of narcotics in 2022, created an exciting global development for the cannabis industry, with the influx of dispensaries and producers attracting investors and tourists worldwide. However, this accelerated growth may be short-lived as the country is currently reviewing to end the adult-use market and solely allow the use of cannabis for medical purposes.
- The Japanese CBD market is growing and is promising, due to its high purchasing power, and its per capita investment in wellness. The country relies on international CBD imports as currently there is no legal domestic production.
In a difficult global economic environment, businesses and regulators alike are taking a pragmatic approach to the cannabis industry. On the part of businesses, this is the result of multiple constraining factors – the requirement to work within certain regulatory limits, the difficulty in accessing funding or expanding sales channels, the ongoing recalibration of targets as the outlook for the industry shifts, and changes in response to developments at different levels.
For regulators, pragmatism is reflected in cannabis reform that is shaped by past experiences and insights from other regions and countries – the failure of prohibition as a means to control cannabis usage, the benefits of approaching cannabis regulation from a health-oriented perspective, and the economic potential of nurturing cannabis-related industries.
Significant milestones such as the opening of legal adult-use markets in Europe, or the potential for the same in Australia, are not met with the exuberance shown during the initial spread of medical cannabis markets across the globe. This is partly a reflection of different economic circumstances, but also speaks to a more measured outlook from participants in the cannabis sector, and those looking to join it. Promising developments in multiple areas show progress towards a larger, more sophisticated and more internationalised global cannabis industry.
Based on past experience, companies and investors are able to navigate the industry based on a more realistic assessment of its pace of growth.
Sponsors
We’d like to say a massive ‘thank you’ to all sponsors of The Global Cannabis Report: 4th Edition, in particular our Headline Sponsor, Rokshaw Laboratories, the UK-leading manufacturer and distributor of medical cannabis.
Other dedicated sponsors include: PharmaCann International, Celadon Pharmaceuticals, TrolMaster, Linnea, CANNAVIGIA, IMCI, Hempstreet, Storz & Bickel, Australia Natural Therapeutics Group (ANTG) and Crystallized Nectar.
Without all of our sponsors’ support, the production and publication of this report would not have been possible. They have contributed to research that will undoubtedly drive the global cannabis industry forward.
The Global Cannabis Report: 4th Edition is now available to download for free*. Get your copy here.
*The free-to-download version of this report does not include market sizing data and analysis. Please see the associated, paid-for data packages for more information about acquiring market sizing data and analysis.
