The multi-faceted applications of cannabis and its derivative have brought about significant changes in the perception of marijuana globally. While key geographies across the globe are striving to legalize marijuana for medical usage, recreational or adult use of the same is also gaining significant traction primarily in the North American region. With more than 23 states and District of Columbia legalizing medical marijuana, and the increasing application base of industrial hemp, the cannabis market in North America is poised to grow over $20.67 billion by 2020 at double digit CAGR through 2015 to 2020.
Multiple regulatory body and associations have emerged or have become active owing to the recent legalization of cannabis, however, federal bans are anticipated to continue impeding the market growth through the forecast period. Irrespective of the stringent government regulations, the market will be driven by factors such as the collaboration of automotive industry and cannabis industry players and use of cannabis oil in e-cigarettes.
A less discussed but widely used derivative of cannabis is Industrial hemp. While a federal ban on the production of the same plagues the market currently, certain lawmakers are in an effort to put an end on the ban, and exclude hemp from the definition of marijuana.
Colorado is believed to be the epicenter of the cannabis industry, since it is the only state other than Washington that has a well defined legal and regulatory framework along with an active market for both medical and recreational marijuana. However, California currently leads the U.S. legal marijuana market with a share of more than 45% of the total market value as of 2014.
Market players from a host of industry verticals have been aggressively putting in efforts to gain significant market shares, while the market is largely in its nascent stage. While pharmaceutical companies are becoming the major beneficiaries of this market, software and infrastructure providers are also increasing their market share in the cannabis ecosystem. The future growth of the cannabis market is largely reliant on the legalization of recreational or adult use of marijuana which is expected to gain a market share of almost 30% by 2020.