The Growth of Legal Cannabis and Hemp: Sales and Trends from 2020 -2024 and Future Projections
The global cannabis and hemp industries have undergone significant transformations since 2020, driven by legalization efforts, shifting consumer attitudes, and growing demand for cannabis-based products. Both industries have experienced rapid growth, with annual sales numbers steadily increasing, and forecasts suggest that this growth is poised to continue. This article provides an in-depth look at the yearly sales figures of legal cannabis and hemp since 2020, along with projections for the industry as we approach 2025.
Legal Cannabis Sales: 2020-2024
The cannabis industry has evolved into a multi-billion-dollar sector, bolstered by legalization efforts across North America and other parts of the world. Below is a breakdown of global cannabis sales from 2020 to 2024:
1. 2020: The Year of Record Growth Amidst a Pandemic
- Global Sales: $21.3 billion: North America: The U.S. and Canadian markets dominated, accounting for the majority of global cannabis sales. The U.S. alone saw cannabis sales of around $17.5 billion, a 46% increase over 2019.
- Market Trends: COVID-19 led to a surge in cannabis consumption as people sought relief from anxiety, insomnia, and other pandemic-related stressors. Online sales and deliveries of cannabis products spiked.
- New Legal Markets: Illinois and Michigan saw their first full year of legal adult-use cannabis sales, contributing significantly to the overall numbers.
2. 2021: The Post-Pandemic Boom
- Global Sales: $25.7 billion
- U.S. Sales: $20 billion
- Key Drivers: Several U.S. states, including New York, Virginia, and New Mexico, moved forward with cannabis legalization in 2021, increasing the market’s potential.
- Trends: The introduction of cannabis-infused beverages and the growth of CBD and wellness products fueled further expansion. Medical cannabis programs also saw increased participation globally, particularly in Europe and Latin America.
3. 2022: Expansion into New Markets
- Global Sales: $32 billion
- U.S. Sales: $23 billion
- Legalization Milestones: Germany announced plans to legalize cannabis for adult use, making it one of the most significant moves in Europe.
- Trends: The U.S. continued to dominate the cannabis market, but international markets began to contribute more substantially to global sales. Germany’s move towards legalization in Europe and Mexico’s gradual progress with medical cannabis reform highlighted global acceptance.
4. 2023: Industry Challenges and Opportunities
- Global Sales: $36 billion (estimated)
- U.S. Sales: $26 billio
- Trends: Despite continued growth, the cannabis industry faced significant regulatory challenges, including taxation issues and market saturation in some U.S. states, leading to price compression. Still, new legalization efforts in states like Maryland and Missouri buoyed sales.
5. 2024: The Turning Point
- Projected Global Sales: $42 billion
- Key Trends: The introduction of federal cannabis banking reforms in the U.S. is expected to lower barriers to growth by providing cannabis businesses access to banking services and better capital. Europe’s medical and recreational markets, especially in Germany, are expected to drive international sales higher.
Hemp Sales: 2020-2024
While the cannabis market has garnered more attention, the hemp industry—fueled by the 2018 U.S. Farm Bill that legalized hemp cultivation—has seen its own boom, driven primarily by the growing demand for CBD, industrial hemp, and hemp-derived products.
1. 2020: The CBD Craze
- Global Sales of Hemp-Derived CBD: $4.7 billion
- Trends: The U.S. continued to dominate the hemp CBD market, accounting for nearly 70% of global sales. The popularity of CBD in wellness products like oils, tinctures, and topicals surged.
- Hemp Fiber and Grain: Industrial applications of hemp, such as textiles, biofuels, and construction materials, began gaining traction, but hemp-derived CBD remained the top driver.
2. 2021: Regulatory Challenges and Market Expansion
- Global Sales of Hemp-Derived CBD: $5.8 billion
- Trends: The U.S. Food and Drug Administration (FDA) delayed setting clear regulations for CBD, which created uncertainty in the market. However, international markets in Europe and Asia saw increased interest in hemp cultivation, particularly for textiles and industrial uses.
3. 2022: Diversification of Hemp Products
- Global Sales: $6.6 billion
- Trends: Industrial hemp began to gain a larger share of the overall market, with the construction industry experimenting with hempcrete and other eco-friendly materials. The European Union provided funding for hemp-related research, signaling growing interest in sustainable hemp industries.
4. 2023: Market Maturity
- Estimated Global Sales: $7.2 billion
- Trends: Hemp’s versatility in textiles, bioplastics, and agriculture continued to expand, while the CBD market saw slower growth due to regulatory challenges in the U.S. However, increasing acceptance of hemp-based products in cosmetics and food boosted demand.
5. 2024: Focus on Sustainability
- Projected Global Sales: $8 billion
- Key Trends: Hemp’s environmental benefits, including its ability to sequester carbon and restore soil health, have drawn attention from the sustainability sector. Industrial uses of hemp, such as biodegradable plastics and sustainable packaging, are expected to grow significantly.
Forecasts for the Cannabis and Hemp Industries (2025)
As the world looks toward 2025, the cannabis and hemp industries are expected to continue their rapid expansion, albeit with some challenges and shifting market dynamics.
1. Global Cannabis Sales Projections for 2025:
- Projected Sales: $50-60 billion
- Key Drivers:
- U.S. Federal Legalization: Many industry experts predict that the U.S. will move closer to federal cannabis legalization by 2025, which would open the door to interstate commerce, reduce operational costs, and foster industry consolidation.
- European Market Growth: Germany’s full legalization of recreational cannabis is expected by 2025, potentially making Europe the second-largest cannabis market behind North America. Other countries, like Switzerland and Luxembourg, are also expected to follow suit.
- Product Diversification: The continued rise of cannabis beverages, edibles, and wellness products, including cannabinoids like CBN and CBG, will drive further consumer adoption.
- Technology and Innovation: Advances in cannabis cultivation technology, such as AI-driven growing systems and eco-friendly packaging solutions, will streamline production and distribution, contributing to industry growth.
2. Global Hemp Sales Projections for 2025:
- Projected Sales: $10-12 billion
- Key Drivers:
- Sustainability Initiatives: Hemp’s role in sustainability will become increasingly important as industries like fashion, packaging, and construction look for alternatives to traditional, environmentally damaging materials.
- Growth of Industrial Hemp: The industrial hemp market, particularly for uses in bioplastics, paper, and building materials, is expected to grow substantially. More industries are looking to hemp for its ecological benefits.
- Hemp-Derived CBD: Despite regulatory hurdles, CBD will continue to grow, especially as health-conscious consumers seek natural remedies. Further research into cannabinoids and their health benefits will expand the market.
Challenges and Opportunities Moving Forward
While the cannabis and hemp industries have enormous growth potential, they also face challenges that may impact future sales:
- Regulatory Uncertainty: The U.S. and other markets still face significant regulatory hurdles, particularly regarding CBD and banking for cannabis companies. These issues could slow industry expansion unless reforms are enacted.
- Market Saturation: As more states and countries legalize cannabis, some markets, particularly in North America, are experiencing price compression and competition. Market consolidation may be inevitable.
- Global Competition: Countries with favorable climates and low labor costs, such as Colombia and Thailand, are positioning themselves as major cannabis exporters, potentially disrupting established markets like the U.S. and Canada.
Conclusion
Since 2020, both the cannabis and hemp industries have grown exponentially, with no signs of slowing down as we move toward 2025. Global sales of legal cannabis are projected to reach $50-60 billion by 2025, driven by continued legalization efforts, product innovation, and increasing consumer demand. The hemp industry, while smaller, is expected to grow as it becomes a key player in the sustainability movement, with industrial uses gaining more traction.
Both industries will continue to face challenges, particularly in regulatory environments, but the opportunities for growth, innovation, and positive environmental impact make cannabis and hemp pivotal industries in the global economy.