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Americas Cannabis Market to Reach a Value of $$293,791.0 million by 2025

Published Date:   January 2021

The Americas cannabis market stood at $93,487.2 million in 2019, which is projected to reach $293,791.0 million by 2025, witnessing a CAGR of 22.5% during 2020–2025 (forecast period). The consistently increasing cannabis cultivation in the region, changing government regulations related to cannabis legality, and rapid growth in the medical cannabis sector are some of the factors driving the Americas cannabis market.

The COVID-19 pandemic crisis ill-affected the growth of the Americas cannabis market initially. A minor degree of suspension in trade and raw material supply was encountered in early 2020. The imposition of lockdown across several Latin American (LATAM) countries came with the temporary suspension of agricultural and industrial activities, leading to minor issues with hemp-cultivation and supply. Further, as cannabis is a plant commodity, extra efforts are made to maintain cleanliness and decontamination. Such factors initially affected the market growth, which was neutralized shortly by the increase in the product demand from regular as well as new customers.

THC Category To Dominate Market throughout Forecast Period

Based on product type, the Americas cannabis market is bifurcated into cannabidiol (CBD) and tetrahydrocannabinol (THC). The THC category held larger share in the market during the historical period (2018–2019), and it is set to continue its dominance in the coming years owing to the numerous health benefits offered by THC. THC is considered useful in treating appetite loss, nausea, insomnia, pain, muscle spasticity, glaucoma, and anxiety. Such factors resulted in the higher revenue generation from the sale of THC in the Americas cannabis market in the past.

On the basis of application, the cannabis market is bifurcated into medicinal and recreational. The recreational category is predicted to witness higher growth in the market during the forecast period, especially in the THC application subsegment. The push for the legalization of cannabis in North American and South American countries is primarily leading to the rising demand for recreational marijuana. For instance, out of the total 50 U.S. states, 35 states, along with the District of Columbia, have already legalized marijuana for medical consumption, 15 of which allow adults to legally use the drug for recreation, as of November 2020. Thus, the growing demand for cannabis for both medicinal and recreational applications is set to boost the Americas cannabis market in the coming years.

The U.S. is the largest and fastest-growing country in the Americas cannabis market. It can be well understood from the fact that according to a survey conducted by an American thinktank, Pew Research, more than half of the U.S. citizens believe that marijuana should be legalized. The country is focusing on allowing the use of cannabis, with the Marijuana Justice Act already decriminalizing the substance. Moreover, the increasing investments in the cannabis supply chain are propelling the business growth for market players. For instance, on-demand marijuana and cannabis delivery service firm Dutchie raised $3 million in 2018 from venture capital firms.

Mergers and Acquisitions Are Important Strategic Developments

The increasing investments in the industry through mergers and acquisitions are propelling the Americas cannabis market in a positive direction, with companies focusing on consolidating their position at the regional as well as global levels.

For instance, in May 2020, Aurora Cannabis Inc. acquired Reliva, a CBD maker, in a $40 million all-stock purchase deal. This will help Aurora expand its reach, as Reliva sells a range of CBD products, including drink mixes, gummies, lip balms, pet tinctures, and skin creams, in the U.S.

Similarly, in January 2020, Colgate-Palmolive Company announced that it would be acquiring a hemp CBD toothpaste brand. Hello Products, an oral care brand based in New Jersey, U.S., offers a line of CBD toothpastes, mouthwashes, and lip balms.

Aurora Cannabis Inc., Canopy Growth Corporation, Aphria Inc., Cronos Group Inc., GW Pharmaceuticals plc, Trulieve Cannabis Corp., Cresco Labs Inc., Green Thumb Industries Inc., Auxly Cannabis Group Inc., OrganiGram Holdings Inc., HEXO Corp., and CannTrust Holdings Inc. are the major players operating in the Americas cannabis market.