Global Cannabis Sales To Skyrocket To $57 Billion In 2026, Says Top Market Research Firm
14-Sep-22 05:25:38
Global cannabis sales will grow to $57 billion in 2026, according to the latest projections from BDSA, a top Colorado-based cannabis market research firm. Furthermore, in the U.S., cannabis sales will skyrocket to $42 billion in 2026, which will make up 75% of total global cannabis sales. And, despite concerns caused by inflation, legal cannabis sales in the U.S. will surge to $27 billion by the end of this year, a 7% jump over last year's sales of $25 billion.
On the forecast, BDSA CEO Roy Bingham was mindful of the current challenges facing the market. “The ‘hockey stick’ trend of sales growth seen in the early years of legal cannabis has passed, and economic and regulatory headwinds are exerting pressure on legal cannabis markets,” he said in a public statement. “Still, our updated forecast predicts that steady gains in developing U.S. markets will continue to drive single-digit annual growth in total U.S. legal sales in 2022, with continued growth prospects out to 2026.”
The BDSA forecasts were adjusted due to factors such as "erosion of price in environments with high retail per capita numbers." For instance, Oregon and Washington have imposed moratoriums on issuing new licenses in an effort to combat chronic over-supply. The BDSA forecast also noted that even though sales have plateaued in some of the older markets such as California, Colorado, Washington, and Oregon, newer markets are experiencing brisk sales growth. An example of this is the Illinois market, which is expected to bring in approximately $2 billion in total sales in 2022, a 14% increase over 2021 sales.
New markets will be the significant sales driver until 2026, as the number of non-legal states is rapidly dwindling, according to BDSA. So far in 2022, New Jersey has launched adult-use sales, with New York expected to follow suit later this year. The launch of these two markets in two very populous states "represents an expansion of legal cannabis access to approximately 22 million adults, who are forecast to contribute roughly $5 billion to the $42 billion legal sales total in 2026."
Unsurprisingly, as more states legalize adult-use, the medical markets have also been affected, as patients have access to increasing variety and lower prices in neighboring adult-use markets. For example, Arizona, which launched adult-use sales in early 2021, medical sales have sharply fallen. BDSA projects annual dollar sales in Arizona’s medical channel will be 30% lower than the 2021 annual dollar sales total and roughly half the annual sales total seen in 2020 — the last full year of medical-only sales. By contrast, the Colorado medical channel still saw modest growth in annual sales for roughly two years after the launch of its adult-use market in 2014.
SOURCE: Forbes