The North American Cannabis Report: 3rd Edition

In 2021, the North American cannabis industry continued to grow and showed more promise than ever, with New York, New Jersey, Virginia, New Mexico, Montana and Connecticut all enacting, amending or passing adult-use cannabis legislation during the year. This state-by-state approach to legalising adult-use cannabis has especially benefited America’s larger multi-state operators, who are gradually expanding into emerging state markets, acquiring licences and establishing cultivation facilities and distribution channels as new laws are implemented. Despite a wealth of optimism for full cannabis legalisation in the United States after President Joe Biden was elected and the Democrats took control of the Senate, there has been very little movement by both House Representatives and Senators to pass new laws that would create a clearer path for the industry. Prohibitions Partners has combined all of this opportunity with current consumer behaviours and anticipated legislation on both the adult-use and medical sides to create sales projections from 2022 to 2026. In the US, adult-use sales are estimated to reach US$18.5 billion in 2022 and grow by 218% to US$58.8 billion by 2026. As adult-use markets grow, they will eat into medical markets. With that in mind, estimated sales will grow by 41.5% between 2022 and 2026, from US$9.2 billion to US$13.1 billion. Canadian adult-use sales are estimated to experience healthy growth as well, from just over US$4 billion in 2021 to US$7.6 billion in 2026, or by 91%. The federal adult-use programme will flatten medical sales, however, which are expected to decrease by 11%, from US$440 million to US$379 million.

• Trends - North America
• · Legislation
• · COVID-19's impact
• · Adult-use demographics and product trends
• · Licit and illicit cannabis sales in Canada
• · Mergers and Acquisition
• Trends - Canada
• · Canadian cannabis inventory vs. sales
• · Right sizing and retail ramp ups
• · Exports of medical cannabis from Canada
• · Legacy products and innovation
• Trends - USA
• · US public opinion on cannabis legalisation
• · State-by-state legalisation update during 2021
• · Emerging US mega-markets
• · Regional patchwork of regulations
• · Hemp, CBD and persistent THC taboos
• Market Sizing
• · Canada
• · USA
• · States estimated to experience rapid growth
• · Estimated medical sales in the US
• · CBD Sales in the US
• Expert Interviews
• · Chris Beals, Weedmaps
• · Jeffrey Raber, The Werc Shop
• · Joe Hodas, Wana Brands
• · Irwin Simon & Denise Faltischek, Tilray

• · Prohibition Partners estimates that, by 2026, adult-use cannabis sales will go from US$18.5 billion to US$58.8 billion in the US and the Canadian market to go from US$4 billion to US$7.6 billion.
• · The effects of lockdowns and stay-at-home orders that created sky-high adult-use cannabis sales in 2020 continued through 2021 across North America, with more record-breaking regulated sales.
• · Men still purchase the vast majority of cannabis in 2021, out-buy-ing what women buy by more than half, according to Headset. Growth is largely attributed to Generation Z consumers, whose sales share grew steadily through 2020 and 2021.
• · According to New York’s Viridian Capital Advisors, there were 306 cannabis industry mergers and acquisitions in 2021, more than three times the 86 counted in 2020.
• · Florida’s largest cultivator and retailer, Trulieve Cannabis, also made history in 2021 by making the largest cannabis acquisition in the US thus far: Arizona-based Harvest Health & Recreation Inc. for US$2.1 billion.
• · Canada’s smaller craft cultivators and producers have ramped up, growing market share with premium cannabis products. Many of the country’s largest LPs are downsizing and struggling to retain market share.
• · The Canadian industry is firmly in its right-sizing phase, with the market still vastly oversupplied and a glut of retail storefronts, particularly in the populous province of Ontario.
• · The federal Cannabis Act is scheduled for a review, and there are high hopes for a change to the rates of taxation, marketing restrictions and more representation of visible minorities in the workforce.