April 12, 2024
Legal Marijuana Market

Legal Marijuana Market is Estimated to Witness High Growth Owing to Increasing Legalization across Countries

The legal marijuana market has witnessed a significant growth over the past few years owing to increasing legalization of cannabis for both medical and recreational purposes across various countries. Cannabis finds applications in various products such as dried flower, edibles, topicals, concentrates and others due to its medical properties for treating chronic diseases, pain management and mental health conditions. In addition, changing consumer perceptions and growing social acceptance has opened up new avenues for recreational use as well.

The global legal marijuana market is 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.

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 players are focusing on strengthening their distribution networks and offering a wide range of products to meet the growing demand from the market.

The key opportunities in the market include increasing sales of cannabis-infused products due to a rise in social acceptance, new product launches catering to various medical applications and adoption of legal marijuana for recreational purposes especially in North American regions.

Globally, the market is witnessing strong growth in North America owing to the legalization of marijuana in countries like the U.S. and Canada. Moreover, countries in Europe, Latin America, Asia Pacific and the Middle East are also gradually adopting regulations to legalize medical marijuana, which is expected to drive the global expansion of the legal marijuana market during the forecast period.

Market drivers

One of the major drivers for the growth of the Legal Marijuana Market Size is the increasing legalization across countries. Proactive government measures legalizing both medical and recreational use of cannabis are encouraging investments and new product innovations in the market. According to trade estimates, countries that have legalized marijuana have witnessed nearly 25% growth in sales annually. This has prompted other regions to also consider legalization to gain the related economic benefits. Such favorable regulations are expected to boost the demand for legal marijuana over the coming years.

PEST Analysis

Political: Legalization and regulation of recreational cannabis is a political issue that varies greatly between different countries and states/provinces within those countries. In regions that have legalized recreational use, regulation over licensing of growers and retailers directly impacts the market.

Economic: Local economic conditions including personal income levels, tax rates on legal cannabis products, availability of investment capital, as well as overall economic growth impact demand. A strong economy can enable more discretionary spending on legal cannabis.

Social: Changing social views regarding cannabis use, both recreational and medical, are influencing decisions by lawmakers to legalize or expand existing laws in various jurisdictions. Younger demographics favoring legalization may drive future market growth.

Technological: Advancements in farming techniques, equipment for production and processing, supply chain software for inventory and fulfillment are helping scale operations and lower costs. Mobile apps and e-commerce platforms support distribution to consumers.

Geographical Regions of Concentration

In North America, the United States and Canada represent areas where the legal marijuana market is highly concentrated in terms of value. Several U.S. states have legalized recreational use and Canada nationwide legalized it in 2018, opening large consumer markets. The industry is anticipated to continue significant expansion across North America as more states alter policies.

Fastest Growing Geographical Region

Latin America is forecast to experience especially strong growth in the legal marijuana industry over the coming years. Starting from a small base currently due to prohibition across most countries, momentum is building towards legalization reforms. Mexico may serve as an influential model if it moves to legalize recreational cannabis, potentially catalyzing changes elsewhere in Central/South America. With a population of over 600 million, the potential market size would be vast. A domino effect of legalizing countries could position Latin America as the fastest growing geographical region globally.

*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it