Catching the Growth of the Cannabis Industry
The following content is sponsored by eToro
Catching the Growth of the Cannabis Industry
The global stance on cannabis is changing rapidly.
With a wave of medical and recreational legalization occurring, there are now 70 countries with some form of legalization. As billions of investment dollars pour in, the cannabis industry finds itself entering a brand new chapter.
This infographic from eToro provides key information for investors on how the global cannabis market is making significant strides forward.
The World’s Legal Cannabis Markets
In just a few short years since legalization momentum kicked off, societal views on cannabis have changed tremendously. Examples of this include:
- Dispensaries being deemed essential businesses during the pandemic.
- Uber announcing its intention to incorporate cannabis deliveries.
- Malta becoming the first country to legalize cannabis in Europe for recreational use.
This shifting dynamic is part of why the global cannabis industry now generates over $20 billion in legal recreational sales on an annual basis.
The title for the world’s largest cannabis market belongs to the U.S.—generating more than $16 billion in sales in 2020. However, their regulatory landscape is also one of the trickiest to navigate, as federal legalization has yet to occur despite over 30 states having legalized cannabis in some form.
While this unique situation leaves a lot of potential money off the table, it also provides lots of potential upside for the industry should legalization trends persist. In 2022, Mississippi, Oklahoma, and Delaware are considered likely to legalize, which would take the small tally of states without any form of legal cannabis from 14 to 11.
Here’s how cannabis sales figures compare in various regions around the world:
|Country/Region||Legal Cannabis Markets by Sales in 2020 ($B)|
This multi-billion dollar market is supported by a robust supply chain consisting of growers, retailers, support systems, and biotechnology companies. Each will become more vital, as the industry continues to grow and elevate to new highs. In 2020, consumer spend crossed past $20 billion, and will spike towards $37 billion by 2023.
But that’s just the beginning of the growth story.
Key Trends to Watch
Compared to other industries, cannabis has had a very slow start. For decades, innovation has been relatively idle given factors like prohibition which has lasted for nearly 90 years.
But nowadays, a swath of new cannabis products and technologies are hitting dispensary shelves.
For instance, the Californian market saw 7,000 additional new products in 2020 compared to 2019. Put another way, there was an average of 19 new products in dispensary shops, daily.
What’s more, some of these innovations can be seen in product popularity ranks:
|Product Category||Estimated Sales 2021||Estimated Sales 2022||% of Sales 2022|
|Tinctures & Sublinguals||$292M||$347M||1.1%|
Flower continues to dominate as the traditional method to consume. However, non-combustible methods like edibles and vape products have gained traction more recently, with vapes expected to see a 30% rise in sales in 2022. In addition, CBD products are growing fast in popularity, especially amongst women who make up 60% of CBD sales.
In the years to come, thousands of additional new products and technologies will pop up, suggesting that product preferences may continue to adapt.
A Bright Future For Cannabis
The cannabis industry’s momentum has stirred up investor interest across the board. This can be seen through the average size of cannabis equity capital raises, which has grown 165% from $7.5 million in 2020 to $19.1 million in 2021. Momentum can also be seen through the cannabis stock indexes, which are showing signs of recovery.
But where does cannabis go from here? Things are moving rapidly, and by 2024, the global cannabis space is expected to be worth a massive $103 billion. Europe and North America will make up the largest components of this market, valued at $39.1 billion and $37.9 billion, respectively. But other regions are also forecasted to demonstrate some impressive numbers.
Here’s what the forecasted 2024 global legal cannabis market will break down:
|Region||Projected Market Value 2024|
At over $100 billion, the cannabis industry’s market value can potentially eclipse that of online betting and gaming.
How Can Investors Take Part?
eToro’s CannabisCare Smart Portfolio* gives investors direct access to the growing cannabis market.
Curated by experienced and proven investment teams, the thematic portfolio offers exposure to a broad range companies invested in cannabis, with no management fees.
*Your capital is at risk.
Smart Portfolios is a portfolio management product, provided by eToro Europe Ltd., which is authorized and regulated by the Cyprus Securities and Exchange Commission.
Smart Portfolios should not be considered as exchange traded funds, nor as hedge funds.
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