Unpacking The $58B Cannabis Market Boom, BDSA Forecasts For 2028

BDSA’s latest market forecast released on Wednesday heralds a new era of unprecedented growth in the global cannabis industry, predicting legal sales to ascend to $58 billion by 2028 from $36 billion in 2023. This anticipated growth, characterized by a robust compound annual growth rate of 10%, is largely fueled by the expanding U.S. market.

Consulted by Benzinga about these projections, Brendan Mitchel-Chesebro of BDSA provided a roadmap for understanding the factors driving the sector forward.

U.S. Market Leading Global Growth

Mitchel-Chesebro says the adult-use market in the U.S. is the primary engine of growth, “Adult use is driving U.S. growth, which in turn, propels the international market dynamics.” This trend is expected to intensify, with emerging states like New York and New Jersey adding significant momentum. Mitchel-Chesebro highlighted New York’s potential despite challenges around its unlicensed retail stores, projecting a $2.1 billion increase in total legal sales by 2028.

Emerging Markets: The New Frontiers Of Growth

BDSA's forecast also points to emerging adult-use markets as significant growth drivers, with states like Connecticut, Maryland, Missouri, New Jersey, New York and Illinois poised for rapid expansion. Mitchel-Chesebro emphasized the importance of these emerging markets, noting that Ohio, Florida and Pennsylvania “are forecasted to see the fastest growth, underscoring the potential of states transitioning from medical to adult-use sales.”

Mature Markets: A Closer Look To Challenges

Mature markets like California, however, face their own set of challenges. Price compression and illicit competition have stifled growth in some regions, though there are exceptions. Michigan, for instance, has demonstrated resilience by continuing to grow legal sales despite significant price drops. “Michigan’s experience offers lessons on navigating the complexities of mature markets,” said Mitchel-Chesebro.

Opportunities In The International Cannabis Landscape

However, it’s not just the U.S. fueling this green wave. The report estimates total sales outside the U.S. and Canada at $2.4 billion in 2023, with a forecasted growth rate of 24% through to 2028.

Internationally, the cannabis market is witnessing notable developments, with countries like Germany and Mexico moving towards more liberal cannabis policies. “Germany scaled back their plans for adult use launches…Mexico is signaling they’re about to launch adult-use sales,” Mitchel-Chesebro explains. With BDSA forecasting Mexico’s market to reach $2.1 billion in sales by 2028, these countries represent significant emerging opportunities within the global cannabis landscape.

Consumer Trends And The Future Of Cannabis

Furthermore, consumer trends highlight a shift towards social consumption post-pandemic and an increasing focus on price. “Social consumption seems to be coming back…36% of US consumers now prioritize low price over convenience,” he said, underlining the changing landscape of cannabis consumption. These insights reflect the evolution in consumer behavior, indicating a return to communal experiences and a heightened sensitivity to pricing and other factors likely to influence market strategies and product offerings in the coming years.

As the cannabis industry continues to navigate regulatory changes and market dynamics, BDSA’s forecast and Mitchel-Chesebro’s analysis offer a comprehensive look at what lies ahead. With adult-use markets leading the charge in the U.S. and emerging markets globally poised for significant growth, the future of cannabis appears vibrant and diverse.

For those eager to dive deeper into these transformative forecasts, BDSA's expert Brendan Mitchel-Chesebro extended an invitation to join a free webinar on March 20 at noon MT. He promises an in-depth exploration of the new market forecast report.