$43B U.S. Cannabis Market By 2027 Forecast BDSA Market Analysts

BDSA's recent update to its five-year global legal cannabis market forecast illuminates a thriving industry on the cusp of substantial growth.

The forecast anticipates the global legal cannabis market will swell to $55 billion by 2027, primarily driven by surging sales in the adult-use sector.

In the U.S., the analysis firm BDSA projects a $43 billion legal cannabis market by 2027, reflecting a compelling 11% compound annual growth rate (CAGR) between 2022 and 2027. An impressive $35 billion of this market is expected to be attributed to the adult-use segment.

Additionally, the report spotlights states poised for significant expansion, with New York and New Jersey both anticipated to become $2.5 billion markets by 2027.

In an exclusive interview with Benzinga, BDSA's analysts Michael Arrington and Brendan Mitchel-Chesebro explore the dynamics of the U.S. cannabis market, where mature markets are slowing down and new adult-use markets, such as Michigan, are thriving with exceptional growth.

“In the U.S., we observe a complex landscape with various cannabis markets contributing to an overall national growth trend, albeit with nuanced details. While established markets are showing signs of slowing down or even declining, newer adult-use markets in the East, such as Massachusetts and Illinois, are exhibiting strong growth,” Arrington said.

International Markets

Canada's national adult-use cannabis market is stabilizing, while medical cannabis sales are declining globally, differing from North America's consumer-driven approach.

International markets, excluding the U.S. and Canada, show limited growth. Mexico legalized adult use, but implementation hurdles persist. Meanwhile, Germany's plans for commercial use have scaled down, affecting global forecasts.

The global cannabis market is complex, with distinct trends in the U.S., Canada, and international markets. The U.S. and Canada remain primary industry drivers, while international markets watch for potential expansion.

U.S. Highlights: Michigan and Missouri

Michigan's cannabis market, labeled as "unrestricted but limited," has experienced remarkable growth characterized by fierce competition, declining prices, and robust consumer engagement.

The unique dynamics of this market include its emphasis on retail availability and affordability, as consumers tend to favor convenience and cost savings in their purchasing decisions.

Furthermore, cross-border trading, similar to what has fueled Missouri's success, plays a pivotal role in Michigan's accomplishments, highlighting the intricate interplay of factors in the cannabis industry's growth and success.

"Notably, Michigan continues to experience remarkable growth. Missouri, surrounded by partially legal states, has seen significant expansion in its first year of adult use, with an anticipated billion-dollar market this year. The industry has much to unpack in the U.S., including the diverse driving factors and the evolving landscape of categories, medical cannabis, and stabilization in the Canadian market," Arrington said.

Missouri's introduction of adult use into an already thriving market brings unique challenges.

Despite Missouri's smaller population, the initial projected $1 billion market sales for their first year of legal adult-use cannabis suggests a strong demand.

The presence of cross-border trading, although challenging to quantify is a significant factor influencing market dynamics. “The complexity of predicting a state's performance upon launching adult use is influenced by multiple variables," Arrington concluded.

Photo by Mark König on Unsplash.