The cannabis industry in North America has undergone significant changes in recent years, with a growing number of states and provinces legalizing the use of marijuana for medical and recreational purposes. This shift in legal and cultural attitudes towards cannabis has led to a booming industry, with new businesses and products emerging to meet the demands of consumers. All of this has led to record cannabis sales in 2022.
In this article, we will explore the current trends driving cannabis sales in North America, including changes in legislation, consumer behavior, and product development. We will also examine the industry's challenges and opportunities as it continues to grow and evolve.
Market research shows that the global legal marijuana market size was valued at USD 27.7 billion in 2022, with an expected compound annual growth rate (CAGR) of 24.3% between 2023-2027, leading to a projected market value of USD 82.3 billion by 2027. North America leads the revenue share with more than 78.8% in 2022.
Despite a slight downturn in sales in 2022, the industry continues to thrive. The reason for the decline is mostly due to a rise in inflation coming out of the pandemic, resulting in fewer sales as consumers are forced to tighten their belts.
According to Marijuana Business Daily, cannabis is now legal for medical use in 39 states and the District of Columbia. Additionally, cannabis use has been approved for adult-use (age 21 or older) in 21 states and the District of Columbia. Several states were added to this list within the last year. Mississippi legalized cannabis for medical use in 2022. Four states legalized cannabis for adult recreational use in 2022: Rhode Island, New York, Maryland, and Missouri.
According to Finances Online, the states with the highest annual cannabis sales in the USA were the older markets where businesses have had more time to establish themselves. Additionally, adult-use has created additional sales beyond what could be achieved in medical-use only states.
· California: USD 2.75 billion
· Colorado: USD 1.56 billion
· Washington: USD 1 billion
· Oregon: USD 777.6 million
· Michigan: USD 633 million
Marijuana Business Daily statistics show that US adult-use sales will increase to around USD 58.8 billion by 2026. Part of this growth will be attributed to large adult-use markets, like the one in New York, ramping up sales.
Despite some hiccups in the industry, Canada’s sales for 2022 continued to show solid growth. Ontario’s provincial cannabis wholesaler, the Ontario Cannabis Store (OCS), suspended delivery of supplies due to a cyberattack launched against a supply chain partner. Labor issues in British Columbia brought the provincial cannabis distribution center to a standstill in August. These two issues left some stores with no product for weeks, impacting sales.
According to Research and Markets, Canadian adult-use sales are expected to maintain healthy growth, climbing from just over USD 4.4 billion in 2022 to USD 7.6 billion in 2026, a 91% increase. The federal adult-use program is predicted to drive down medical sales, resulting in a decrease of around 11% from USD 440 million in 2022 to USD 379 million in 2026.
Data shows that three provinces showed the most significant growth in monthly sales. Ontario’s sales rose to USD 110 million monthly, up 30% from 2021. This was due primarily to an increase in the number of stores. Alberta was up 14% per month to USD 49.6 million and British Columbia’s sales increased by 17% per month to USD 41.7 million.
The legalization of cannabis sales has also stimulated new ways to consume cannabis. Although many long-time consumers still prefer to smoke dried flower, other forms of ingestion are becoming increasingly popular. These include edibles (52%), oils (36%), capsules (17%), and drinks (12%). Newer consumers gravitate toward edibles (40%) and oils (38%) with only 11% preferring dried flower.
In 2022, we saw oil and tinctures take 53.2% of the cannabis revenue share. The reason for this is the increased use of marijuana for medicinal purposes. Since these types of cannabis products are used in medical studies, consumers gravitate toward their use over more traditional forms of cannabis. For instance, medical research shows that cannabis oil is a viable treatment for arthritis, nausea, and vomiting common in cancer patients, sleep disorders, and anxiety. It is expected that sales of oils and tinctures will continue to grow at a rate of 26.1% from 2023 to 2030.
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The cannabis industry is experiencing rapid growth, with the North American market for marijuana and related products projected to reach USD 73.6 billion by 2027. As more and more states legalize the use of marijuana for medicinal and recreational purposes, the industry is poised for even more growth in the future. But what else does the future of the cannabis industry hold?
One trend expected to drive growth in the industry is the increasing use of cannabis for medicinal purposes. The legalization of marijuana for medicinal use has led to the development of new products and therapies that are specifically designed to address a wide range of health conditions. This is expected to drive growth in the industry as more and more people turn to cannabis as a form of alternative medicine.
The cannabis industry is also expected to benefit from the growing acceptance of marijuana as a safe and responsible recreational substance. As more and more states legalize marijuana for recreational use, the industry is expected to see a significant increase in demand for cannabis products.
Overall, the future of the cannabis industry looks bright, but it is essential to be aware of challenges that may arise as the industry continues to grow. Issues such as ever-changing laws, banking issues, and public opinion regarding cannabis use will remain as the industry continues to evolve. Despite these obstacles, the cannabis industry is poised for even more growth in cannabis sales in the future.
Want to learn more about cannabis sales? Download our free 2023 industry report.
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