U.S. markets accounted for 81 per cent of the US$15 billion in cannabis sales in 2019

Cannabis is spreading its leafy green limbs around the world.

According to Arcview Market Research and BDS Analytics, global sales of the plant increased by 48 per cent to US$15 billion in 2019 and are on pace to cross the US$43 billion threshold by 2023.

Lifted by the launch of new recreational markets across the U.S., adult-use sales of the drug rose by 48 per cent to hit US$8.9 billion. Sales of medical cannabis grew even faster, rising at a rate of 54 per cent, good for worldwide sales of US$6.2 billion.

And 81 per cent of those total sales took place in the U.S. “These stunning growth numbers prove the negative stigma of cannabis is coming to an end in the U.S.,” said Troy Dayton, founder and chief strategy officer of The Arcview Group. “What’s incredible is the realization that so much potential growth remains both domestically and globally,” Dayton said.

“With sales jumping nearly 50 per cent in an industry with only a handful of markets online, this report quantifies why there’s so much anticipation from producers and shrewd investors waiting for national and international markets to open up or mature,” he added.

What’s happening in Canada?

Canada’s cannabis industry experienced growing pains in 2019, thanks largely to regulatory and supply issues, but a Statistics Canada report showed the country still spent just shy of $1 billion on legal marijuana between October 2018 and September 2019. The number fell far short of the over $4 billion in sales projected by analysts such as Deloitte, but it also illustrates the room for growth as the market matures.

“The fallout in public market valuations is not trending with the tremendous growth curve of this exploding market,” Dayton said. “That discrepancy represents a unique and time-bound opportunity for investors.”

Tom Adams, editor-in-chief of Arcview Market Research and managing director of BDS Analytics Industry Intelligence, said he hasn’t seen a market like this in 20 years. “The disconnect between investor sentiment and the facts on the ground is as dramatic as anything I’ve seen since the dot.com stock crash of 2000, which happened just as the internet caught fire with consumers,” Adams said.

The analysts expect to see another 38 per cent increase this year as new markets open up and existing ones become more effective at putting their products in front of consumers. It is anticipated that recreational sales will lead the way going forward.

“Five billion additional dollars were spent on legal cannabis in 2019,” Adams said. “That’s bigger than the entire legal cannabis market was in 2015.”

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