Global Legal Marijuana Market Will Grow At Highest Pace Owing
Author : Sneha Biswal | Published On : 23 Feb 2024
The legal marijuana market comprises the cultivation and distribution of marijuana for recreational and medical purposes. With the growing legalization of marijuana for both medical and recreational use across various countries, the demand for legal marijuana has increased significantly. Growing awareness about the medicinal properties of marijuana in reducing chronic pain, aiding cancer treatment, and easing neurological disorders have prompted governments to legalize its use. Marijuana contains compounds like cannabidiol (CBD) and tetrahydrocannabinol (THC) that have therapeutic benefits.
Key Takeaways
Key players: 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 adopting advanced technologies like AI, IoT, big data analytics to improve production efficiency and meet the growing product demand.
Growing demand: There is increasing demand for legal marijuana from the medical sector owing to its wide applications in reducing chronic pain, anxiety, depression, and preventing cancer, arthritis, and other diseases. It is estimated that the medical segment will exhibit fastest growth over the forecast period on account of the rising acceptance of marijuana for medicinal use.
Technological advancements: Players in the market are investing significantly in R&D to develop innovative cultivation techniques like indoor vertical farming and hydroponics. Adoption of smart technologies also helps in optimizing production, inventory management, and distribution. Technological breakthroughs are further expanding the applications of marijuana-based products.
Market Trends
Growing adoption of organic cultivation methods: With rising health consciousness, many cultivators are adopting organic fertilizers and natural techniques for growing legal marijuana. This is increasing demand for organic cannabis products.
Product innovation and diversification: Players are expanding their product portfolios by developing diverse product forms like extracts, tinctures, topicals, foods and beverages infused with CBD and THC. This is increasing adoption across various user groups.
Market Opportunities
Increasing investments in the industry: With progressive cannabis laws and business-friendly policies, investments in the legal marijuana industry have surged. This provides opportunities for cultivators to expand production.
Emerging international markets: Countries like Germany, Italy, South Korea, Australia, Mexico, Chile, and Columbia have legalized medical marijuana, providing lucrative opportunities for players going forward.
Impact of COVID-19 on Legal Marijuana Market Size.
The COVID-19 pandemic has impacted the growth of the legal marijuana market. During the initial lockdown phases imposed across various countries, the demand for legal marijuana declined significantly as dispensaries were shut down temporarily. However, with gradual lifting of restrictions and reopening of dispensaries, the sales have picked up pace again. The pandemic has also changed consumers' purchasing behaviors and priorities. More people turned to consuming cannabis for medical purposes to boost their immunity and manage stress/anxiety due to the uncertain situation. For recreational users as well, cannabis provided relief during lockdowns when other sources of entertainment were unavailable. Though the market witnessed declines initially, companies strategized to ramp up delivery options and online portal facilities to continue serving customers. The demand has rebounded strongly post lockdowns as social activities resumed. Going forward, firms need to focus on maintaining supply chain resilience, prioritizing workforce safety, and leveraging digital modes to engage with consumers amid any future disruptions.
North America Concentration of Legal Marijuana Market Value
In terms of value, North America accounts for the lion's share of the global legal marijuana market currently. This can be attributed to the early legalization of medical and recreational use across Canada and select states of the USA like Colorado, Washington etc. Countries in this region have been pioneers in driving innovations in the cannabis sector through progressive regulations. The strong network of dispensaries, widespread social acceptance and higher per capita spending power of consumers have helped North America lead the way in terms of cannabis market size. In the forecast period as well, North America will continue consolidating its position as most lucrative market for marijuana producers and retailers.
Fastest Growing Region for Legal Marijuana Market
Asia Pacific region is emerging as the fastest growing market for legal marijuana globally. While consumption and commercial activities related to cannabis are still largely illegal in many Asian nations, countries like Australia, Sri Lanka, South Korea have signaled positive intent through relaxing rules or ongoing discussions around medical use policies. Changing cultural mindsets, rising investment interests from international players and budding opportunities in ancillary industries are fueling growth. Moreover, the sheer size of populations in major APAC economies like India and China indicate huge untapped market potential once regulations evolve. Overall, APAC's legal marijuana sector is poised for exponential expansion in the coming years. Producers worldwide are cognizant of these opportunities and actively exploring entry strategies.
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