Despite a slowdown in growth in 2022, a new report from the cannabis industry analysts at BDSA projects 14% growth in the U.S. cannabis market in 2023 and beyond, reaching $44.5 billion in 2027, up from $26.1 billion this past year.
“Legal cannabis spending slowed significantly in 2022 due to rapid price declines across all markets,” BDSA CEO Roy Bingham said in a press release. “Despite this, our updated forecast predicts strong growth in the U.S. driven by developing markets, particularly the adult-use markets of Missouri, New Jersey and New York.”
Though the industry saw rapid growth through the COVID-19 pandemic, 2022 saw a contraction in several mature markets, the first time year-over-year sales have fallen since legal cannabis programs were implemented. According to BDSA, California, Colorado, Nevada and Washington suffered a combined spending decline of 16.5% from 2021 to 2022.
The new market forecast projects a “return to growth” for the mature markets, but emerging markets are expected to be a main driver of increasing sales. In 2022, for example, New Jersey and Montana launched adult-use sales and saw 140% growth compared to medical only sales from the previous year. Missouri, which began adult-use sales in February, grew by 84% in its second full year of medical-only sales, from 2021 to 2022.
U.S. legal cannabis spending is expected to grow at a compound annual growth rate of 11.3% through 2027, driven primarily by the New York, Florida, New Jersey and California markets. BDSA also predicts the launch of several new adult-use markets by 2027, including Maryland and Oklahoma in 2024 and Florida and Ohio in 2025.
And while it does not foresee federal legalization, it sees the possibility of some reform, like banking, within the next few years.
BDSA also forecasts the Canadian market will see 12% overall growth this year, becoming a $5.7 billion market by 2027 at a compound rate of 6.3%.
In total, BDSA projects a global cannabis market of $59.6 billion by 2027, with an annual growth rate of 13.2%.
— Brian Beckley