Global Legal Weed Market Could Soar To $55 Billion In Four Years

Leading cannabis data provider BDSA is forecasting that the global legal cannabis market could rack up $55 billion in sales in 2027. Showing strength from the Midwest and Northeast, the U.S. is estimated to pull in $43 billion for the country’s legal market, with $35 billion of those sales coming from the adult-use channel.

Other interesting tidbits from BDSA’s forecast include:

• Among mature markets, Michigan has experienced the most substantial growth, and is expected to become a $3.8 billion market by 2027.
• Newer Northeastern markets New York and New Jersey are each projected to fetch $2.5 billion in four years.
• Older markets California and Colorado will both undergo modest rebounds from pandemic-era sales dips. The Golden State is estimated to take in $5.24 billion in 2027, while Colorado will pick up $1.7 billion in sales for the same time period.
• Markets beyond the U.S. and Canada are expected to reach $6.3 billion in sales by 2027. Much of this growth will come mostly from adult-use channels.

When asked why Michigan posted the most substantial growth among the U.S. legal markets, Roy Bingham, co-founder and CEO of BDSA, cited a number of factors ranging from a substantial increase in dispensaries to ramped-up enforcement of illicit production and distribution.

He also pointed to another development that has contributed to Michigan emerging as an outlier among the U.S. adult-use markets: cross-border purchasing.

“Michigan does not track cross-border purchasing but it is a factor in nearly every market, especially those bordered by non-legal or limited states,” explained Bingham. “Michigan borders three states without legal adult-use: Indiana and Wisconsin have no legal access and Ohio is medical-only. These states are home to some 18 million adults.”

As to the steep declines with the industry’s most mature markets, Colorado and California, Bingham responded, “Markets tend to peak a handful of years after launching adult-use, once production, distribution, and the percentage of adults regularly consuming begins to plateau.”

Also not helping matters in the early states were the over-licensing and production, which “led to extreme competition and a race to the bottom in terms of pricing,” added Bingham. “Manufacturers and retailers have a tougher job innovating to provide discernable quality or price advantages to be able to command higher prices for their products.”

And unlike Michigan, which benefited from cross-border commerce, Colorado and California, conversely, did not as more neighboring states legalized. Inflation also exacted a toll.