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The global legal marijuana market — including recreational use — was estimated to be worth $13.8 billion last year and is projected to reach $66.3 billion by the end of 2025, according to a 2018 report from California-based market research firm Grand View Research.
There are two widely studied components of the cannabis plant: CBD, a non-hallucinating compound sold in bud, oil and tinctures, used for calming inflammation and the nerves; and THC, the psychoactive constituent that is more often used for recreational purposes and is still illegal in most countries.
According to a 2018 report by the European Monitoring Centre for Drugs and Drug Addiction, both CBD and THC ingredients are applied in medicinal practices but used to treat different symptoms.
Momentum in the region
Currently, Canada and Uruguay are the only two countries that have fully legalized the recreational use of cannabis. But the piecemeal legalization of medicinal marijuana has been spreading across the world, including, notably, nations such as Israel, Australia, and Germany.
The global legal marijuana market size is expected to reach USD 66.3 billion by the end of 2025, according to a new report by Grand View Research, Inc. It is anticipated to expand at a CAGR of 23.9% during the forecast period. Increasing legalization and use of marijuana in medical as well as recreational applications is expected to promote the growth.
Growing adoption of cannabis as a pharmaceutical product for treating severe medical conditions, such as cancer, Parkinson’s disease, Alzheimer’s disease, arthritis, and other neurological conditions is anticipated to drive demand for medical marijuana in the forthcoming years. Increasing need for pain management therapies and growing disease burden of chronic pain among elders is also expected to boost demand.
Legalization of medicinal marijuana and decriminalization in some countries has led to a significant decrease in the black market, as people are resorting to legally purchasing cannabis for medicinal as well as recreational use. Moreover, government earnings through taxation is further viewed as an opportunity for countries to earn revenues. Presence of a large customer pool and legalization of medical marijuana in U.S. and Canada is expected propel the product demand from North America.
However, legalization of medicinal cannabis in European countries, accompanied by stringent rules and regulations regarding the product sale and cultivation may limit the overall growth in Europe and in turn for the global market. Other promising markets for Cannabis are Australia, Germany, Poland, Colombia, Uruguay, and Israel. Israel is currently at the forefront of providing technology and knowledge transfer to the other world markets. As the newer markets such as the U.K. and Thailand create their legal structure for cannabis, the revenue growth is expected to witness significant growth. Moreover, countries like South Africa and New Zealand are discussing legalization for medicinal marijuana and may emerge as viable markets in the forthcoming years.