Big things are on the horizon for cannabis, and in 2021 we have seen big shifts when it comes to the top takeaways in the cannabis industry.
For starters, the global legal cannabis industry has shown exponential growth, with further substantial growth expected in the coming years. According to market research, the global cannabis industry was valued at USD 22.10 billion in 2020, with North America, the largest and fastest-growing market, contributing USD 16 billion.
The regulatory landscape of the cannabis industry in North America has been in constant flux over two decades, with significant strides being made in the past three years. While Canada beat the United States to making cannabis fully legal with its Cannabis Act in 2018, the 38 U.S. states that have made either recreational or medical use of cannabis legal boast a population six times the size of Canada’s, providing a much broader market base.
These factors, coupled with the banking challenges created by marijuana’s status as an illicit substance, make the cannabis industry an incredibly volatile sector. For this reason, cannabis business owners need to make rigorous efforts to keep up-to-date with all cannabis-related information at all times.
In this article, we are going to look at the top 6 key takeaways to keep in mind when looking at big things in the cannabis industry in 2021.
These are our top 6 key figures and stats to remember:
According to this report by New Frontier Data, legal regulated markets accounted for only 6% of global spending on cannabis in 2020. However, with strong growth in the largest and most dominant markets – U.S. and Canada – global legal cannabis sales are projected to reach an estimated USD 51 billion by 2025.
Projecting a compound average growth rate (CAGR) of 18% over the next few years, the U.S. is expected to contribute the lion’s share of this value, with sales exceeding USD 43 billion by 2025.
In spite of the trend for cannabis legalization across U.S. states, the plant remains a Schedule I substance under the federal Controlled Substances Act. Financial institutions in the U.S. dealing with marijuana-related businesses are automatically subject to the Bank Secrecy Act, and required to carry out thorough customer due diligence to ensure they adhere to the Financial Crimes Enforcement Network’s regulations.
As a result, most financial institutions are wary of doing business with marijuana-related businesses, with bodies like Visa, Mastercard, and several major American banks shying away from the cannabis industry. Even when a cannabis company finds a financial institution willing to work with them, it is not uncommon for the institution to cease business relations with little or no prior warning.
Since 2012, when Colorado kicked off the cannabis legalization movement in the U.S., a whooping 38 states have made cannabis legal, either for recreational or medical use, or both. Of these, 18 states and Washington D.C. allow recreational use of cannabis.
With a Gallup survey showing that public support for the legalization of marijuana has risen from just over 30% in 2001 to 68% in 2020, the increasing trend of cannabis legalization in the U.S. is expected to continue at a rapid pace.
Canada is a global leader in the cannabis industry. In 2018, it became the first G-7 nation to make cannabis fully legal for medical, recreational, and industrial use, setting into motion the wheels of change in the international cannabis marketplace.
According to Statista, the cannabis market in Canada is projected to be valued at USD 7.3 billion by 2025. While this figure places Canada behind the U.S. in terms of total domestic retail sales, Canada will remain the leading cannabis exporter globally through 2025, with multi-billion-dollar licensed producers like Canopy Growth Corp and Tilray present in over 20 countries worldwide.
Since October 2019, when Canada rolled out its “Cannabis 2.0” products, which included edibles containing cannabis, cannabis oils, topical ointments, tinctures, and other non-combustible health-and-wellness cannabis products, the market has seen a surge in the popularity of these products, with demand projected to continue to grow through 2022.
Research by Deloitte estimates the Canadian market for edibles and other alternative cannabis products to be worth CAD 2.7 billion annually. The North American Cannabis Report by Prohibition Partners found that 48% of Canadian consumers preferred ingesting cannabis-containing edibles, while another 36% preferred oil, both numbers higher than the 34% who preferred the traditional format.
A 2019 study by Valens GroWorks found that, although most cannabis users do not have a medical prescription for it, their reasons for using cannabis are often related to health and well-being. The study found that 79% of Canadian cannabis users used it to relax, while 69% used it to relieve stress, and 60% used it for sleep.
Everett Knight, Executive VP, Strategy and Investments for Valens GroWorks, said, “Our study found that almost 80% of Canadians are turning to cannabis for relaxation and well-being, even though the majority of users don’t have medical prescriptions. Clearly, even without clinical research, Canadians believe cannabis has a positive impact on their health, and LPs should take note.”
As 2021 comes to a close, the North American cannabis industry continues to show significant growth. In the wake of legislation sweeping across the U.S., stakeholders should expect federal cannabis reform in the next few years, especially with the Democrats holding the White House.
Although Canada had relatively low sales in 2020 due to the slow rollouts of Cannabis 2.0, the market bounced back exceptionally in 2021, and the country’s licensed producers continue to perform highly on the global stage.
With cannabis being legal in Canada and in most states in the U.S., North America will remain the engine for the industrialization and commercialization of cannabis and in shaping the emerging global consumer culture over the next several years.
We expect to see cannabis continue to grow in the coming years, and we are excited to follow along for the ride.
In an industry that is growing this quickly, in a brand new legislative space - it is really a once in a lifetime opportunity to be a part of.
So follow along! If you are looking for more important insights on what happened in the cannabis space in 2021 check out our full report below!
HERE WE WILL PUT THE INDUSTRY REPORT CTA
“KayaPush has it all in one platform where you can kind of build what you need. Especially as a start-up, that’s important to us to be cost-friendly. You have the best price for what you’re offering. ”
-Marry Ann from Riverside Wellness-