Global legal cannabis market to reach $166 billion by 2025

The global legal cannabis market was worth $12 billion in 2018 and is set to reach $166 billion by 2025. The global cannabis market, both legal and illicit, is worth $150 billion, according to a new white paper from Euromonitor. By 2025, the global legal cannabis market will represent 77% of the market. A report made by Euromonitor identified the countries with the greatest market potential.

According to the Cannabis Legalization Index, North America dominates the global legal cannabis market. Canada and the United States rank first and second respectively.

Within Latin America, Uruguay leads the ranking in the number four position, followed by Argentina, Chile and Mexico. Peru is ranked 29th.

It should be noted that the new cannabis legalization index developed by Euromonitor ranks 100 countries with market potential for legal cannabis.

Three indicators are used to qualify its attractiveness: legal status, socio-demography and current consumption of tobacco, alcohol, and cannabis.

Along these lines, the global legal cannabis market is estimated to reach $166 billion by 2025.

The first five countries in the global legal cannabis market index

1. Canada set the pace in the adoption of legal cannabis in 2018 and will continue to play an influential role in the global industry through its corporations and regulatory framework.
2. The U.S. presents a substantial opportunity with its large consumer base, heavy alcohol and tobacco consumption, and significant disposable income, but fragmented regulation illustrates a short-term problem for investment.
3. Italy is increasing the production of medical cannabis and its conditions as a favorable market for legalization. The high recreational use of illegal cannabis and legal products with low THC content makes the country an attractive market for legal cannabis.
4. Uruguay pioneered the legalization of cannabis in 2013, but it was not until 2017 that retail sales of the product were established. The country could be an influential exporter of leaves and extracts and serve as a regulatory model for other markets. The country has been a pioneer in this area, however, its importance will diminish as legalization develops globally.
5. Germany has the attributes to become an attractive market due to the considerable consumption of tobacco and alcohol, together with a growing percentage of the population using cannabis.

Cannabis expected to grow more than tobacco

“A key question for the industry is what models the new countries will adopt for the legalization of cannabis,” says Shane MacGuill, head of tobacco research at Euromonitor International.

Geography, attitudes toward products such as tobacco and alcohol, and the level of government involvement in the economy are three factors that will impact future regulatory frameworks.

At the same time, the industry will continue to experience exponential growth while alcohol and tobacco will grow at a much slower pace.

From 2018 to 2025, legal cannabis is estimated to grow more than 2% globally, compared to alcoholic drinks at 1.4% and tobacco at 1.2%.

The future of the global legal cannabis market

Euromonitor predicts that America and Europe will dominate the legal cannabis industry in the short and medium-term.

However, the movement behind cannabis normalization is now universal and it is expected that legalization will begin to accelerate in other regions.

According to the report, globally, consumers increasingly support legalization, a trend that will continue to grow. Opportunities for use are expanding, making cannabis legalization widely disruptive.

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