By / October 28, 2019

Medicinal cannabis sales are still on the rise

Medicinal cannabis sales are still on the rise, and according to the State of Legal Cannabis Markets Report released by Arcview Market Research and BDS Analytics, global sales of legal cannabis in licensed stores more than tripled, between 2014 and 2018.

Furthermore, in the next decade, Wall Street estimates anywhere from $50 billion on the low side to a huge $200 billion in annual sales. 

If this most aggressive estimate is correct, by the next decade the cannabis industry may have become somewhere between 2 and 2.5 times larger than the non-alcoholic beverage industry.

Recreational cannabis sales vs medicinal cannabis sales

But the question remains, “what can you invest your money in?”

There are many variables that need to be taken into account when buying cannabis shares.

This includes geographical focus. It also includes supply offers and partnerships that individual cannabis shares have held over the past two years.

The state of legitimate marijuana markets predicts that global recreational marijuana sales will be nearly double that of 2024.

This hearing supports the idea that new markets (e.g. Mexico) are legalizing cannabis for adult use in the coming years.

But don’t forget the potential for medical marijuana

In fully legalized markets we often see the cannibalization of the medical industry by the adult industry.

After all, why do patients pay more or take the extra step of going to the doctor for cannabis? They can just go to the pharmacy to buy it themselves.

Medicinal cannabis sales are mostly from dried flower.
Global sales of legal weeds in licensed stores more than tripled between 2014 and 2018 to nearly $1 billion and nearly $11 billion. (Source)

All eyes seem to be on the potential of the recreational weed industry. However, investors would be wise not to forget about medical marijuana. Medical cannabis can be an even smarter game.

Reasons why medical cannabis should remain on top of your investment radar

Medicinal cannabis sales are higher than recreational cannabis

First of all, medical cannabis patients are much more attractive to those looking into weed stocks.

According to a preliminary study conducted in Canada in Q4 2018, medical weed patients are more likely to buy cannabis products and use them more often than recreational cannabis users.

This is a group of patients with a higher margin

More importantly, medical marijuana users generally get significantly higher cannabis margins than recreational consumers. 

The reason for this difference is that patients using marijuana are much more likely to buy derivatives such as edible drinks, beverages, oils, topicals, or concentrates.

The global cannabis market could be even larger

Investors should also take into account that the global market may be more conducive to the sale of medical cannabis in the next decade.

Even if Mexico were to complete the legalization of recreational cannabis in October, there would only be three legal markets for adults worldwide.

The money rolls in from medicinal cannabis sales.
The US CBD market may be worth X billion dollars in 2323 alone. (Source)

For comparison, more than 40 countries have given the green light on medicinal marijuana to some extent. 

Medicinal cannabis sales and the younger generation of users

Medical cannabis products can also be a smart way to connect or attract the younger generation of consumers.

Young adults who can buy cannabis products were affluent to high-margin derivatives. They avoided dried flowers compared to other age groups.

This younger generation is expected to stimulate the development of the pot industry in the coming decades. Investors in cannabis stocks should focus on this rapidly growing consumer group.

The availability of CBD

Finally, investors in the cannabis industry can observe the greatest increase as cannabis CBD grows.

CBD is a non-psychoactive cannabinoid that is best known for its perceived medical benefits.

One report suggests that the U.S. CBD market may be worth X billion dollars in 2323 alone. This should be a generous reward for all investors who bought CBD stocks.

(Featured image by Kelly Sikkema via Unsplash)

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