The International Cannabis Industry
The production of legal cannabis is one of the fastest growing industries in the world today. Following its legalisation in regions around the world, the cannabis industry is set to become a lucrative and thriving business sector. Statistics currently place the sector’s worth at billions of dollars– and it is still in its infancy.
In a report called “2019 Update to The State of Legal Marijuana Markets” which was released on the 15th of June 2019 by Arcview Market Research and BDS Analytics, it was found that global consumers of cannabis racked up an estimated $12.2 billion in 2018 alone. This is approximately 25% more than the income garnered in the previous year – $9.5 billion. The industry is expected to skyrocket by 38% in 2019 with a total of $16.9 billion in sales, while compound annual sales growth between 2017 and 2022 is expected to clock in at 26.7%. At these rates, the reports predict that by 2022, global marijuana sales will be worth $31.3 billion.
Corroborating reports by Beau Whitney, a senior economist and vice president at New Frontier Data, place the worth of the legal marijuana industry in the U.S at up to $10.4 billion in 2019. These statistics were revealed in an interview with the Associated Press.
Further analysis from Whitney shows that investors put $10 billion into the North American legal marijuana industry in 2018 alone. This is a long way from the $5 billion the industry witnessed in investments three years prior. Whitney believes investors will raise more than $116 billion for the industry by next year.
In a study conducted by Grand View Research, Inc., the global legal marijuana market was expected to reach $146.4 billion by the end of 2025. The industry is expected to witness a compound annual growth rate of 34.6%.
In same study, it was estimated that medical marijuana, which emerged as the largest marijuana-related sector in 2016, would be valued at $100.03 billion by 2025.
Which Country Grows and Exports the Most Cannabis?
The country which grows the most cannabis may come as a surprise to most individuals. This is due to the fact that cannabis use is not even legal within its borders. As reported by the United Nations Narcotics Board, the country with the highest cannabis exports is the United Kingdom.
In 2016, the UK produced almost half the world’s cannabis, totaling 95 tons of cannabis. This is 44.9% of the entire globe’s cannabis production. Canada takes the position of second highest cannabis producing country, producing a massive 80.7 tons within the year.
The UK takes the lead in cannabis exports as well, exporting approximately 2.1 ton within the year. This accounts for an estimated 70% of the world’s cannabis exports. While recreational marijuana use is still illegal in the UK, legalisation for medicinal purposes is a recent development which should be implemented next month.
Trends in Growing Cannabis in the USA
In the United States of America, cannabis is legal for medical use in 33 states, whereas it is legal for recreational use in 10 – including Washington D.C., the country’s capital. Following the growth and evolution of the cannabis industry, commercial growers have come up with new and innovative methods to cultivate the crop. These innovations range from product diversification to the application of artificial intelligence (AI) to smooth the process. Here are some trends as witnessed in the North American cannabis industry.
The legalisation of cannabis has opened an entirely new channel of revenue for those involved in production, distribution and sales of cannabis products. It is no surprise that top firms have been attracted to the industry and now want to take on production roles. Companies involved in the production of alcohol and tobacco are also beginning to key in on the cannabis industry.
Constellation Brands, a reputable liquor brand, has begun to get involved in the cannabis industry following a $191 million investment. In similar fashion, the former CEO of Molson, an alcoholic beverage company, has predicted that the cannabis industry will soon be infiltrated by alcohol companies. The fusion of products is set to change the pace of the cannabis industry forever.
As cannabis production continues to be regulated, software systems which permit the tracking of the cannabis have been introduced. These software programs permit growers and the state to ascertain the location of any cannabis product at any given point in time. Whether a new plant or a delivered product, regulators can put a location to cannabis at all times.
One of the most popular seed-to-sale software utilized in the USA is the Metrc system. Metrc stands for marijuana enforcement, tracking, reporting and compliance. It is currently utilised in a number of legal states including California, Colorado and Michigan.
Following the increasing demand for cannabis and cannabis products across the globe, it is no surprise that technological advancements are making headway where cannabis growth is concerned. Cannabis tech has continued to grow at exponential rates.
Currently, cannabis technologists are looking for ways to improve the yield and potency of cannabis products. To this effect, fertilisers, LED grow lights and other advancements are being thoroughly researched.
What can Australia Learn?
According to reports offered by The Motley Fool, the fastest growing marijuana market belongs to Germany.
The German marijuana market is expected to reach a whopping $1.6 billion by 2022. Having legalised medical marijuana in 2017, Arcview and BDS Analytics estimated that marijuana sales only totaled $9 million in 2018. With recent projections, the country is expected to increase its cannabis revenue by 17,678 percent!
The reasons behind Germany’s ascension to this spot are varied, including its unrestrictive medical marijuana laws. Patients can access medical marijuana relatively easily.
This is in stark comparison to Australia’s current cannabis laws which are notably some of the most restrictive laws in the industry. In research conducted by New Frontier Data, the market for recreational marijuana would be worth an estimated $5 billion annually, if legalised. Combining recreational and medical marijuana use, the industry could garner an estimated $5.5 billion annually for the Australian economy. The government steadily misses out on valuable revenue channels by making access to medical cannabis so difficult.
While many countries around the world are seeing exponential growth in cannabis-related industries and resulting profits, Australia continues to fall behind with even legitimate patients struggling to access legal medicinal cannabis products. With legalisation potentially in the near future, Australia will benefit financially and with additional research and development to bring high quality cannabis products to those who need them, around the world.