Report: Worldwide cannabis spending expected to hit $12B in 2018

BOULDER — Global consumer spending on legal cannabis is expected to reach $12.2 billion in 2018, a significant increase from the $9.5 billion spent in 2017.

The new projections come from the “2019 Update to The State of Legal Marijuana Markets,” released by Arcview Market Research and Boulder-based BDS Analytics.

The 28 percent worldwide growth is slightly behind the growth rate made in the original SOLMM report released in June 2018. The change is likely due to Canada pushing the launch of its legal program from June to October and California’s expensive tax and regulatory structure creating a challenge for legal operators.

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“Despite the speed bumps in Canada and California, the basic storyline prompting an explosion of investment in the industry in 2018 remains intact,” Tom Adams, managing director and principal analyst at BDS Analytics, said in a prepared statement. “The gradual legalization around the world of a plant which humans have been happily consuming for millennia is creating one of the largest industry-growth phenomena in history.”

The report forecasts that spending growth will accelerate in 2019, jumping 38 percent to $16.9 billion. By 2022, it’s expected to grow to $31.3 billion.

“The entry of some of the largest alcohol and tobacco companies into the cannabis sector, as well as the Congressional passage of a Farm Bill legalizing growing hemp in the United States, were key to making 2018 a year of historical importance,” Troy Dayton, CEO of The Arcview Group, said in a statement. “This year, we also saw two of the world’s three largest legal medical markets — California and Canada — transition to legal regimes that allow all adult consumers to buy cannabis, while voters in the other top-3 market — Michigan — approved a ballot measure to do the same.”

Other findings in the updated report found that there was a valuation explosion in Canada, with five of the country’s top licensed producers reaching a combined market capitalization of nearly $20 billion in 2018. There was a rush of U.S. multi-state operators going public on the Canadian Securities Exchange, with five operators reaching valuations above $100 million and a combined market cap of $5.5 billion.

There are also new potential markets on the horizon, including New York, Utah, New Mexico, New Jersey and even United Kingdom and Mexico.