Legal Marijuana Market is Gaining Momentum fueled by Growing Acceptance of Medical Cannabis

 

Legal Marijuana Market

The global legal marijuana market has seen substantial growth over the past few years driven primarily by increasing legalization of medical cannabis worldwide. Legal marijuana refers to the cannabis sativa plant and its extracts including compounds like tetrahydrocannabinol (THC) and cannabidiol (CBD) that have been authorized for medical and recreational use in various countries. Cannabis and its derivatives find wide applications in the treatment of chronic pain, neurological conditions, cancer, depression, anxiety, and other ailments.

The Global Legal Marijuana Market was estimated to be valued at US$ 20.05 billion in 2024 and is expected to exhibit a CAGR of 7.1% over the forecast period 2024 to 2031.

Advances in research around the medicinal properties of cannabinoids are fueling demand for Legal Marijuana Market Demand weed and its extracted compounds. Rising adoption of CBD-based consumer wellness products and the liberalization of laws around recreational marijuana consumption have also propelled market growth.

Key Takeaways

- 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, and Kardex Group. These companies are investing in automation and logistics technologies to facilitate the production, packaging, and distribution of legal marijuana.

- Rapidly growing demand for medical cannabis for conditions like chronic pain, cancer, arthritis, and neurological disorders is driving the legal marijuana market. Cannabis companies are expanding their product portfolios to address the needs of medical consumers.

- Countries like Canada, Germany, Australia, Italy, Mexico, and Colombia have legalized marijuana for medical and/or recreational use in recent years. This has created new opportunities for licensed cannabis producers to access international markets and patients. Players are focussing on overseas expansion through strategic partnerships and acquisitions.

Market Key Trends

The mainstreaming of cannabis has led to the emergence of new product form factors beyond smokables. Edibles, beverages, topicals, and concentrates infused with THC and CBD are gaining popularity due to their ease of use and discretion. Innovations in extracts utilizing cutting-edge technologies like supercritical CO2 extraction are supporting the development of high-quality, consistent cannabis products.

Porter’s Analysis

Threat of new entrants: New companies entering this market would require extensive capital investment to establish cultivation facilities, dispensaries, and distribution networks. They also need to comply with strict regulations which pose barriers.

 
Bargaining power of buyers: Individual consumers have low bargaining power but large buyers like dispensaries can negotiate better pricing and contracts with suppliers.

Bargaining power of suppliers: There are several cultivation and extraction companies supplying Legal marijuana. Switching costs are low for buyers.

Threat of new substitutes: Though medical marijuana has substitutes like prescription painkillers, it has fewer side effects and is a growing market. Recreational marijuana has no close substitutes.

Competitive rivalry: The market has a mix of large and small players. Competition is based on product quality, reliable supply chain and offering value added services.

Geographical regions where market value is concentrated:

North America is currently the largest market, accounting for over 80% of global legal marijuana market value in 2024. Countries like the US and Canada have legalized both medical and recreational use contributing most to revenues. Several states have established dispensaries and growing facilities.

Fastest growing region for Legal Marijuana Market:

Latin America is expected to be the fastest growing region during the forecast period from 2024 to 2031. Countries like Mexico, Colombia, Uruguay and others are legalizing medical cannabis. Favorable climatic conditions help low cost cultivation and growing acceptance of its medical use will drive higher demand. Partnerships with North American companies will facilitate product availability and market access in the region.