It's the world's most commonly cultivated, trafficked, and used illicit drug, and as the push for legalization at home and abroad grows, cannabis is garnering significant attention from investors, manufacturers, and researchers. Despite the plant being illegal under federal law as a Schedule I drug, the U.S. legal cannabis industry was estimated at $13.6 billion in 2019 with 340,000 jobs devoted to the handling of plants, according to New Frontier Data. A total of 35 states and the District of Columbia have legalized cannabis for medical use, 15 of which allow adults to legally use the drug for recreational use as of November 2020. And that number may continue to rise, as more people are accepting the idea of legalizing cannabis across the United States. This article looks at some of the uses of cannabis as well as the overall market for the drug.
The global legal cannabis market is valued at USD 17.7 billion in 2019 and is expected to expand at a significant CAGR of 18.1% over the forecast period. The rise in the legalization of cannabis in various countries is one of the key factors driving market growth. The use of cannabis for medical purposes is gaining momentum worldwide owing to recent legalization in various countries. Medical cannabis is used for the treatment of chronic conditions, such as cancer, arthritis, and neurological conditions, such as anxiety, depression, epilepsy, and Parkinson’s, and Alzheimer’s disease. Such a wide scope of application is anticipated to bode well for the product demand.
The high prevalence of cancer is expected to be one of the factors driving the demand for legal cannabis. For instance, according to the World Health Organization (WHO), cancer is the second leading cause of death in the world and was responsible for about 8.8 million deaths in 2015. In addition, the growing disease burden of chronic pain and significant side effects associated with opioid usage is expected to drive the demand for medical cannabis, which has proved to be a potent product for chronic pain management.
- More than half of Americans believe cannabis use should be legalized.
- The drug is already legal in 35 states, with 15 allowing adults to legally use it for recreational purposes.
- Shifts in political policy are also changing as we find out more about the uses of cannabis for medicinal purposes.
- Although it is still a controlled substance under federal government guidelines, the FDA continues to evaluate changes to marketing and export rules.
Changing Attitudes Toward Pot
Just like the attitude about the film has changed, so too are people's feelings about cannabis itself. This is especially true as we learn more about the drug and the apparent benefits that come with using it for medical purposes. Once considered an illicit substance, it is still deemed a controlled drug under federal government guidelines. But the stigma is being shed at a breathtaking speed, and it appears cannabis is on its way to the mainstream.
Cannabis is still considered a controlled substance under federal government guidelines.
According to a Pew Research survey, 67% of Americans believe the use of cannabis should be legalized. This is double what it was in 2000—31%—and five times what it was in 1969—12%. A New York University study revealed the percentage of adults aged 50 to 64 reporting cannabis use has doubled in the past decade to 9% and use among adults 65 and older has increased seven times during the same period to nearly 3%. The U.S. cannabis industry will generate $85 billion in sales in 2030, according to Cowen analyst Vivien Azer.
With Jeff Sessions gone and the Democrats in control of the House, significant cannabis reform seems possible this year. Politico pointed out that, in 2019, 296 members of Congress (68%) represent the 33 states with at least medical cannabis, which means there are sufficient votes to pass long-awaited bills. There are already several bills in the new Congress pertaining to cannabis.
Cannabis companies raised $116.8 billion in capital in 2019, according to cannabis industry research firm Viridian Capital Advisors. We can expect this trend to continue, but important to the U.S. industry is also banking reform. Big banks are currently afraid of money laundering charges they may face if they work with these businesses. Besides the difficulty of getting capital, this means tremendous risks and inconvenience for companies operating in cash. The American Bankers' Association has been pushing for more legal clarity and bridging of the gap between federal and state law, and we could see banks warm up to cannabis if bills like the SAFE Banking Act are passed.
President-Elect, Joe Biden, has expressed that he wants cannabis decriminalized as well as having the criminal records of those convicted of possession of the drug expunged. His Vice President-Elect, Kamala Harris, meanwhile was one of the co-sponsors of a bill called the Cannabis Justice Act introduced by Senator Cory Booker, which decriminalizes cannabis. Harris has expressed support of expunging convictions for those caught with cannabis and calls out for a path toward decriminalization and legalization.
Investing Guide, By Deborah Dsouza, Updated Nov 12, 2020, https://www.investopedia.com/articles/investing/111015/future-marijuana-industry-america.aspMarijuana
Legal Cannabis Market Size, Share & Trends Analysis Report By Cannabis Type (Medical, Adult Use), By Product Type, By Medical Application (Cancer, Mental Disorders), And Segment Forecasts, 2020 – 2027, Published Date: Feb, 2020 https://www.grandviewresearch.com/industry-analysis/legal-marijuana-market
Cannabis/Marijuana Market Size, Share and Industry Analysis By Type (Flowers/Buds and Concentrates), By Application (Medical, Recreational (Edibles and Topicals), and Industrial Hemp), and Regional Forecast 2019-2026 https://www.fortunebusinessinsights.com/industry-reports/cannabis-marijuana-market-100219