The legal marijuana market consists of products containing tetrahydrocannabinol (THC) or cannabidiol (CBD) that are approved for both medical and recreational consumption by adults. Marijuana products such as dried flowers, oils, edibles, and capsules are used to treat chronic conditions like arthritis, epilepsy, and cancer as they provide relief from pain and symptoms. With over 40 countries and over 36 U.S. states legalizing marijuana for medical use and 15 states permitting recreational use as well, the market is rapidly growing.
The global Legal Marijuana Market is estimated to be valued at US$ 17.4 Bn in 2024 and is expected to exhibit a CAGR of 7.1% over the forecast period 2024-2030, as highlighted in a new report published by Coherent Market Insights.
Market key trends:
Growing acceptance of marijuana is one the key trends driving the expansion of the legal marijuana market. Many countries and US states started legalizing medical cannabis in the early 2000s and since then there has been an increasing momentum to legalize recreational use as well. Several research studies show marijuana can help manage symptoms of serious medical conditions and help reduce the use of addictive prescription pain medicine. This has boosted social acceptance of marijuana and lobbying for legalization. Moreover, many US states have legalized recreational marijuana as a means to generate tax revenue for their jurisdictions. As per estimates, the legal marijuana industry could contribute over $131.8 billion to the US economy by 2025. The industry is also seeing increased foreign investments in cannabis companies as regulations become more lenient globally aiding its further growth.
Porter’s Analysis
Threat of new entrants: The threat of new entrants in the legal marijuana market is moderate due to high capital requirements for production and processing facilities as well as distribution networks. However, many states have loosened restrictions to allow more business licenses to be issued.
Bargaining power of buyers: The bargaining power of buyers is high due to the availability of a variety of products from different companies. Buyers can easily switch between brands depending on factors like price and quality.
Bargaining power of suppliers: The legal marijuana industry relies on suppliers of inputs like nutrients, lights, and other cultivation equipment. Their bargaining power is moderate since switching costs are relatively low.
Threat of new substitutes: The threat of new substitutes is low as legal marijuana has proven medical benefits and consumers prefer natural products over pharmaceutical alternatives. However, CBD products offer a substitutable option.
Competitive rivalry: Competition is high among existing players due to their large number and ease of entry into some state markets. Companies try to differentiate their products and brand to gain customer loyalty.
Key Takeaways
The Global Legal Marijuana Market Size is expected to witness high growth over the forecast period supported by increasing legalization across countries.
Regional analysis: North America currently dominates the global legal marijuana market and is expected to continue doing so due to widespread legalization in countries like the US and Canada. The Asia Pacific region is anticipated to be the fastest growing market led by countries like Thailand, Australia, and South Korea progressively legalizing medical use of marijuana.
Key players: Key players operating in the legal marijuana market are Murata Machinery, Ltd., Honeywell Intelligrated, Bastian Solutions, Inc., Dematic, TGW Logistics Group, Daifuku Co., Ltd., KNAPP AG, Beumer Group, SSI Schaefer Group. These players are focusing on automation and logistics to enhance production and distribution efficiencies.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it