Legal cannabis sales worldwide are projected to rise 22% this year to over $35 billion, up from $29 billion in 2021, according to a report by Colorado-based cannabis market data supplier BDSA released today.
The rapid rise in sales – covering all categories including flower, vapes, tinctures, edibles and beverages – is expected to continue in the coming years, as the report projects global sales to surpass $61 billion by 2026, a CAGR of more than 16% from 2021.
“Though most legal cannabis markets saw sales soften in the second half of 2021, the global cannabis market is expected to see brisk growth in 2022, driven by strong sales in new and emerging markets in the U.S., steady growth in Canada and international markets lead by Mexico and Germany,” said Jessica Lukas, chief commercial officer at BDSA, in a press release.
The U.S., which makes up the bulk of the global market, reported $24 billion in cannabis sales in 2021 and is now projected to grow 20% in 2022 to an estimated $28 billion. However, pandemic-related challenges led to a weaker second half of the year, the report noted, and the estimates are down from a December BDSA report that predicted the market could reach $30 billion this year.
Despite slower sales towards the end of the year, 2021 laid the groundwork for further optimism for the future of the U.S. cannabis industry. Four more states legalized recreational marijuana through legislative action, including New York, Connecticut, Virginia, and New Mexico, bringing the total number of fully legal states to 18 plus the District of Columbia, while Alabama and Mississippi recently approved medicinal sales.
In 2021, the Midwest proved to be one of the strongest growth regions, BDSA reported: sales in Illinois were up 70% to $1.8 billion and Missouri, which only allows medicinal sales, achieved “an unexpected high” of $210 million.
As the number of non-legal states is “rapidly dwindling” amid bipartisan support for legalization, the report stated that new markets are expected to be a major sales driver through 2026. California is expected to remain the largest market for the foreseeable future, New York, New Jersey, Florida (where recreational sales are expected to be legalized), and Michigan are predicted to be the next largest growth markets. Other “mature” states like Colorado and Oregon will continue to be significant in the coming years.
In Canada, where recreational cannabis is legal nationwide, sales are growing “strongly but slowly,” the report stated. The country reported about $3.8 billion in sales last year and is expected to rise to $4.7 billion this year and nearly $6.3 billion by 2026. Within the country, Ontario is expected to lead growth with the province expected to reach $1.3 billion by 2026, with British Columbia adding $420 million in sales in the period.
Other international markets are also expected to grow rapidly. Although the rest of the world beyond the U.S. and Canada accounted for just $1.4 billion in legal cannabis spending last year, sales are expected to rise to about $2.2 billion in 2022 and $9.5 billion by 2026 – a CAGR of 46% from 2021. Germany and Mexico are expected to lead international growth, as both countries are expected to legalize recreational use and sales in the near future. France and the U.K. could also enter the space within the next five years.