But this current market is tiny compared to where it could be going.
The cannabis market is growing at over 17% per year, largely due to the burgeoning use of CBD based products in the health and pharmaceutical industries.
With over 700 clinical trials currently evaluating the efficacy of different cannabinoids for therapeutic purposes, venture capital firm Canopy Rivers sees an approximate 10 year period before the product enters the mass market, and predicts widespread adoption by big pharma.
By 2050 it could be a 100 billion dollar industry in the US alone.
Europe Lags Behind
While the US and Canada currently have nine out of ten of the largest firms by market cap, the European market is also poised for growth over the next five years.
Germany leads the European medical marijuana market having passed laws in 2017 which permit doctors to prescribe medical CBD, and for health insurance to cover the cost of the therapy. Currently, Germany represents the world’s third largest market for legal cannabis-based products outside of North America.
Whether the EU at large will follow suit by rolling out wider regulation for medical marijuana remains unclear, partly because COVID-19 has put a temporary halt to the debate. Prohibition Partners’ fourth European Cannabis Report, published in 2019, estimates between 60% and 70% of the EU as a whole legalising medical and adult use cannabis by 2023.
Luxemborg has announced it plans to become the first European country to legalise cannabis production and consumption within 2 years.
What are the Economic Benefits of Legalising Weed?
Although difficult to quantify, the economic benefits for legalisation of the marijuana industry are becoming clearer.
Tax revenues can be generated from plant cultivation, oil extraction, production, retail sales, staffing, and licensing. One study suggested that Colorado had banked an extra $130 million in hotel bills alone the year after the state legalised marijuana.
In fact, according to a release from the state’s department of revenue, Colorado has raised roughly $1.02 billion from taxes, licenses and fees since 2014. Last year $125 million of that revenue was directed to the state’s public school funds and $17.2 million to local governments.
Will COVID Pave the Way for The UK Marijuana Industry
While Brexit has been widely touted as detrimental to Britain’s economy, one of the key areas where it may prove useful is in the burgeoning cannabidiol (CBD) and wider cannabis sector.
“With Brexit, the British government will have the option to not comply with EU law in some areas, and one of the first announcements the Food Standards Agency made was to classify CBD as a novel food, something that the EU has yet to officially confirm and is still holding out on this classification”, commented Alexej Pikovsky, chief executive of European medicinal cannabis distributor Alphagreen.
While the UK legalised medical cannabis in 2018, the NHS continues to offer just a handful of medical prescriptions around a limited series of conditions such as pain relief, epilepsy, insomnia, anxiety and PTSD.
Within 3 years, Prohibition Partners sees the UK market at closer to £1bn (US$1.3bn), servicing nearly 340,000 active patients.