Cannabis – a billion-dollar business

Between gateway drug and medicine
In the beginning was hemp: the Chinese were using the plant as a base for medicinal products thousands of years ago. Over the course of time the flower became the joint, which in turn produced the high – and cannabis, the drug made from hemp, was born. After decades of being demonised as "killer weed" and a gateway drug, the tide is now turning again. Research into the use of cannabis for medical purposes has intensified in the USA and Europe over the last few years. This mysterious weed alleviates pain and depression, promotes sleep and stimulates the appetite. It also has over 100 active ingredients - the most important ones being THC and CBD - which suppress chemotherapy-induced nausea and vomiting, for example, and inhibit inflammation. The use of cannabis for medical purposes is now permitted in 23 federal states in the USA.

Pipe dreams
The legalisation of cannabis does not stop at the plant's medical potential, though. More and more countries are relaxing their legislation, and weed can be bought and consumed for enjoyment. Efforts are also being made in this country for weed to be seen as a reality of life rather than the work of the devil. An initiative to have it legalised has already gathered over 20,000 signatures and may thus bring about another referendum. They have already gone one step further in the USA, or more precisely in some federal states. In 2014, Colorado was the first state to allow the recreational use of cannabis. And California has now made a sensational move: America's most populous state approved the consumption of marijuana on 1 January. Prescriptions are no longer required here, as is already the case in seven other states. Not only are the pot-smokers happy, it is also giving rise to a market worth billions. Find here investment solutions on the topic «Cannabis – a billion-dollar business».

Billion-dollar market
Experts estimate that the business generated by weed could grow to seven billion dollars annually by 2020 in California alone. And the next thunderbolt is about to strike: a law legalising the use of recreational marijuana is set to come into effect in Canada on 1 July 2018. Canada will then become the second country in the world after Uruguay to authorise marijuana. Companies can already sniff a profitable business opportunity and are taking up their positions. In mid-2016 there were around 30 companies with a licence to grow cannabis, a number that has now risen to 90. Its commercial significance should increase even further. By way of example, Canadian investment dealer Eight Capital is seeing a "growth story" in the cannabis sector. Analysts assume that the consumption of marijuana could amount to nine billion Canadian dollars in total. Cannabis by-products are set to pull in even more business than the sale of the controlled substance alone. A study by Deloitte forecasts an annual market volume of 14 billion Canadian dollars in this segment. Whether food, tobacco or pharmaceuticals, every industry is zeroing in on the magic ingredient. Companies will have to be patient a little while longer, however: edible marijuana products will not be licensed in Canada until a year after the legalisation of dried cannabis, i.e. in July 2019.

Growth par excellence
Cannabis consumption is increasing rapidly worldwide. The figure of around 200 million people in 2009 had increased to 237 million by 2015 – and the trend is upward. According to ArcView Market Research, 80 per cent of US citizens are currently in favour of the deregulation of cannabis, so there should be a sharp increase in spending on legal cannabis in future. The calculations of BDS Analytics indicate that the market for legal weed in the USA grew to almost nine billion US dollars in 2017. Experts assume – based on the new law in California – that it will grow to 11 billion US dollars over the course of this year. And, since many more federal states are gearing up for legalisation, the market volume could increase to 21 billion US dollars by the year 2021. In fact, estimates for the global market are as much as 63.5 billion US dollars by 2024. However, one thing must not be forgotten amidst the heady growth rate of this sector: marijuana can be a powerful and potentially dangerous drug with strong effects.

Expenditure on legal cannabis (in billions of US dollars)


Market volume for cannabis oil-based medicinal products in the USA (billions of US dollars)


DIRECT ACCESS to investment solutions on the topic «Cannabis – a billion-dollar business».