At first glance:
- Although cannabis is still in the early stages of research, it has been used to treat a number of ailments in medical patients.
- The discovery of CBD through cannabis sparked the research and medicinal use of the cannabinoid CBG and other lesser-known cannabinoids.
- The Farm Bill caused a growing demand for cannabis, with many parts of the country legalizing the consumption of certain cannabis compounds, and many others following suit.
- The boom in recreational cannabis use at the end of 2018 created a rapidly growing concentrate market, which is now just as robust as the ever-popular flower market.
Considering that the cannabis black market has successfully reigned in clandestine transactions for many decades, it is no wonder that legalization in many parts of the world has produced a profitable trading arena in this emerging industry.
As some US states and other countries have begun to adapt legal protocol for the sale of marijuana for medical and possibly recreational purposes, savvy entrepreneurs have begun to see the potential in this new “rush.” environment “.
In fact, after just over a decade of partial legalization, the global marijuana market the size exploded in 2020 with a whopping $9.1 billion in value. And according to industry forecasts, the future of the cannabis retail market is poised to continue its rapid acceleration in the years to come. The report mentioned above estimates an annual compound growth rate of 26.7% for the next seven years.
The many factors driving this burgeoning industry boil down to consumer demand for holistic herbal medicine, unhindered recreational use, and, unsurprisingly, corporate financial support. Additionally, scientific and technological contributions open doors for research into the beneficial contributions, cultivation techniques, and extraction methods of the cannabis plant.
As legalization continues to roll out around the world, the potential for exponential growth in this nascent market shows no signs of abating. Looking ahead, the cannabis spotlight is shining brightly for retail markets.
Legalize medical marijuana
When California became the first US state to legalize medical marijuana in 1996, retail medical dispensaries began offering cannabis-based medications, usually prescribed by an on-site healthcare provider. As the medical marijuana movement gained traction in other states and countries in the following years, consumer demand accelerated retail profits.
Considering that research on cannabinoids and their effects on the endocannabinoid system of the human body had not yet been thoroughly researched due to legal issues, the fledgling industry forged ahead, helping patients suffering chronic and acute disorders.
However, within a few years, medical scientists have deepened their research on the mysterious plant and its healing properties. The discovery of the medicinal contributions of CBD, CBG and other non-psychoactive cannabinoids has been a game changer for the cannabis industry.
When the United States legalized hemp with the passing of the 2018 Farm Bill, the CBD market spread to all corners of the industry. As the rest of the world joined the newly recognized component of the cannabis industry, retail sales in the CBD market soared. In fact, the global cannabidiol market was worth $2.8 billion in 2020 with an expected compound annual growth rate (CAGR) of 21.2% over the next seven years.
As research continues to uncover the medicinal benefits derived from cannabis, the growth opportunity in the retail medical marijuana market is expected to continue to accelerate rapidly.
Colorado and Washington were the first two states in the US to legalize recreational marijuana in 2012. As they began to establish legislation for this Wild West industry, people from all over began pouring into the states, paving the way to profitable businesses.
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 major player in the recreational sector when the country legalized marijuana nationwide in 2018 for adult use. The government entity, Health Canada, oversees operations controlling many provincially appointed dispensaries, but privatized cannabis companies are also thriving in this lucrative industry.
Initial recreational sales in Canada started in October 2018 with a modest turnover of CAD 153 million in a short time. Two years later, however, legal sales for adult use reached C$2.6 billion by the end of 2020.
After the Covid-19 pandemic forced shutdowns around the world, quick-thinking cannabis retail 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 for driving sales in the future.
The green rush that began less than ten years ago in the recreational cannabis sector now shows earnings of 54% of total global sales in the revenue market in 2020. As consumer demand for the intoxicating effects of THC continues to drive sales in the adult retail market, estimated revenue in the future project exponential growth in recreational transactions.
While cannabis flower sales have driven the market for many years, recent developments in extraction processes have brought a new culture to the industry.
Potent THC products in the form of wax, budder, shatter and crumble are creating an exciting segment in recreational sales as consumers seek out the euphoric effects of the potent cannabinoid. dab and vaping has become the new rave of cannabis lingo as this industry sector continues to grow.
Additionally, the medical marijuana industry continues to discover the health benefits of this intriguing plant. Extracting CBD, CBG and other beneficial cannabinoids into oils produces holistic remedies to treat many disorders. Tinctures, edibles and balms infused with effective CBD oils help with medical issues such as pain relief, inflammation and vomiting.
Additionally, medical patients often prefer oil-infused products to smoking flowers as a healthier alternative. Children with debilitating seizures, in particular, cannot inhale cannabis due to the severity of the condition, but often experience immediate relief from tinctures or edibles.
The concentrate sector of the retail cannabis market recorded a 51% revenue share in 2020 as the fastest growing segment in the industry. This explosion in sales shows where this exciting avenue of the industry is heading – nowhere, but upwards.
The future looks good
As technology and science continue to merge in the evolving cannabis industry, the possibilities for rapid growth seem 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 retailers in the recreational and medical cannabis industry, the forecast for exponential growth in the coming years undoubtedly looks quite favorable.