The legal cannabis market is the hottest industry in the U.S. By 2023, Brightfield Group estimates that the total U.S. market will reach $22.7 billion, with a CAGR of 20 percent from 2019 to 2023. While Western states like California, Colorado, Nevada, Washington and Oregon currently make up the vast majority of the market, Brightfield estimates that by 2023, Eastern states will comprise 34 percent of the total U.S. market.

By January 2020, 11 U.S. states will permit legal recreational cannabis sales, and Brightfield Group predicts that number will grow to 16 by 2023. The newest additions include Michigan and Illinois, with recreational legalization measures expected in New York and New Jersey. A total of 33 additional states permit medical cannabis, and a handful of new medical markets are also likely to open by 2023, increasing the total number to 35.

In 2018, medical cannabis spending in Illinois was $145 million. Arcview/BDS Analytics projects Illinois will garner $543 million in combined medical and recreational sales in 2020—and growing to nearly $1.5 billion by 2024 ($213 million medical, $928 million recreational).

Total 2018 revenue from legal cannabis sales in the current top five states:

State Revenue
California      $2.5 billion
Colorado      $1.5 billion
Nevada      $580 million
Oregon      $543 million
Washington      $534 million

 

According to Arcview Group/BDS Analytics, global spending on cannabis for recreational use now outpaces medical. In 2014, global consumer spending on recreational cannabis was $300 million and medical was $3.1 billion—but both have seen significant growth. For 2019, global spending is projected to reach $8.1 billion for recreational use and $6.8 billion for medical. Globally, the market is estimated to hit $40.6 billion, with the majority of revenue coming from North America.

According to BDS Analytics GreenEdge POS retail data, at the beginning of 2014 in Colorado, flower purchases comprised about 69 percent of total cannabis sales. By the middle of 2018, that number had declined to 43 percent. The rise in edibles popularity is partially responsible for this shift in spending.

According to Arcview/BDS Analytics, projected spending on legal cannabis edibles in the U.S. and Canada will nearly double, from $2.2 billion in 2019 to $4.1 billion in 2022.

The non-psychoactive hemp/CBD category is a particularly strong category for edibles and beverages, comprising 53 percent of all product types in the U.S. and Canada, per BDS Analytics (Q3 2018).

Currently in the U.S. and Canada, Arcview/BDS Analytics have estimated that:

  • 71 percent of adults who use cannabis do so for recreational/social reasons
  • 56 percent of adults who use cannabis do so for health/medical reasons
  • 33 percent of U.S. adults who use cannabis do so for both recreational/social and health/medical reasons

Also, non-psychoactive hemp and CBD consumption is on the rise:

  • 13 percent of all U.S. adults have consumed hemp/CBD
  • 10 percent of all Canadian adults have consumed hemp/CBD

In terms of product formats, gummies are now the top-selling style of cannabis edibles, followed by chocolate products and then beverages. All categories of legal cannabis foods and beverages will continue to see growth moving forward.

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