Five years from now, people all around the world will be buying $5 billion worth of legal weed every single month, according to a new market forecast by Colorado-based cannabis analytics firm BDSA.
By the end of 2021, BDSA predicts that the global cannabis industry will have sold $30.6 billion worth of legal pot, a 41 percent increase over 2020's sales total. The agency further predicts that sales will grow at a compound annual growth rate (CAGR) of more than 15 percent, eventually exceeding $62.1 billion in annual sales by 2026.
The vast majority of these sales are coming from the small but growing number of US states that have wisely chosen to legalize adult-use cannabis retail sales. Last year, legal-weed US states sold an estimated $18 billion worth of weed, an impressive 67 percent increase over 2019's sales. This year, BDSA predicts that the US weed industry will grow by another 38 percent in 2021, surpassing $24 billion by year's end.
The expansions in the American market will be partially driven by the swiftly growing spread of adult-use legalization. Arizona, Connecticut, New Jersey, New York, New Mexico, Vermont, and Virginia have all legalized adult-use cannabis sales within the past two years, and legal pot markets in these states should be reaching full steam well before 2026.
Existing markets in states that legalized weed years ago are also continuing to grow, however. In California, which currently boasts the world's largest legal cannabis market, sales have already grown by 25 percent in the first half of 2021. Other existing markets, like Colorado and Oregon, are still making record sales, and new markets like Illinois and Massachusetts have doubled their sales in the past year.
“The cannabis industry continues to show exceedingly rapid growth, particularly within the U.S. market,” said BDSA Vice President Insights & Analytics Kelly Nielsen in a statement. “New markets, both medical and adult-use, are developing at a faster pace than observed in the past, and states are transitioning from medical-only to fully legal in a shorter time frame.”
“The industry continues to thrive, with sales exceeding expectations in several markets,” Nielsen continued. “This, compounded with more states passing legislation to legalize cannabis, drove the increase in BDSA’s outlook for the industry. The expansion and growth of adult-use markets in the U.S. continue to be the driving force of global cannabis sales.”
Although Canada is the largest country to have completely legalized adult-use weed sales, its contributions to the global market remain relatively modest. BDSA predicts that the country will sell $4 billion worth of legal pot by the end of 2021, but also believes that this total will grow to $6.7 billion by 2026. Most of this growth is being led by Ontario, which saw a 90 percent increase in sales from 2020 to 2021.
The rest of the world is far behind North America when it comes to legal weed, but may soon be catching up. So far, Canada, the US, and Uruguay are the only countries to legalize adult-use retail sales, so medical marijuana markets account for all sales outside of these territories. In 2021, BDSA predicts that these international medical pot markets will make a combined $1.7 billion of sales.