Global Spend on Legal Cannabis

The Growing Cannabis Industry Trends 2020

January 23, 2020 0 Comment

The Growing Cannabis Industry – The cannabis industry is a new, emerging area of the market that we believe has tremendous growth potential. According to BDS Analytics, in 2019, legal global cannabis spending was valued at $15 billion. By 2022, spending is anticipated to grow to $30 billion.

Several industry trends are driving this growth, legalization in many U.S. states and countries around the world, health care applications, recreational uses, and merger and acquisition activity. For investors looking for a way to participate in this growing cannabis market, they may want to consider an active management approach.

The Growing Cannabis Industry

Over the past few years, the following trends have driven the industry’s growth.

Global Spend on Legal Cannabis
Global Spending on Legal Cannabis: Source – Cannabis Growth Fund

Global Legalization of Cannabis and Hemp

Cannabis legalization in the U.S. has been building momentum in recent decades. In 1996, California was the first state to legalize cannabis for medical use, and in 2012, Colorado and Washington became the first states to legalize cannabis for recreational use.

By the end of 2018, legalization has gained momentum. Ten states and Washington, DC, have legalized recreational cannabis. In 14 states, cannabis has been decriminalized and in 33 states, cannabis has been approved for medical use.

Looking ahead, more U.S. states are undergoing discussions to end prohibition and regulate cannabis. Congress and nearly all states across the U.S. have over 1,000 bills slated for 2019 legislative sessions covering many issues including authorizing home production, decriminalization of possession of marijuana, sales and income taxes, new medical cannabis programs and modifying regulations for existing laws.

Global Cannabis Market Trends

Global Spending on legal cannabis is anticipated to grow to $30 billion by 2022.

In addition, the 2018 U.S. Farm Bill made hemp an agricultural commodity and removed it from the list of controlled substances. With the potential opportunity for U.S. farmers to grow industrial hemp, “proponents are growing more optimistic and vocal each year about hemp as a potential game changer for U.S. agriculture,” says the American Farm Bureau Federation.

The U.S. is not the only country taking action on legalizing cannabis. Canada became the first major economy to legalize cannabis for recreational use in 2018. Medicinal use of cannabis has been legal in the country since 2001. With a population of 37 million and a GDP of $1.7 trillion, Canada could potentially be a tremendous market for many cannabis-related companies as black-market purchases decrease.

We believe the trend of increased global legalization is important as it could transform the cannabis industry into a legitimate economy of significant size. According to one estimation, the illicit cannabis market is estimated to be worth up to $200 billion.

With increasing legalization of cannabis, a growing number of uses and applications, and increasing merger and acquisition activity, investors have the opportunity to participate in a relatively new growth industry.

Read the complete white paper on Investment Opportunities in the Growing Cannabis Industry from Cannabis Growth Funds.

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