The research study covers the present scenario and growth prospects of the global legal marijuana market for 2016-2020. To calculate the market size, the report considers the revenue generated from legal sales of marijuana. It also presents the vendor landscape of the top six vendors in the market along with listing down the other prominent vendors in the market.
Marijuana, one of the premium variants of cannabis, is used for recreational (psychoactive drugs) and medicinal purposes. Usage of marijuana for recreational purpose is expected to increase significantly over the forecast period, which in turn, can lead to increase in the global demand for marijuana. Vendors are introducing different products like marijuana-based tablets and topical applications to propel the sale of marijuana. In 2015, the market generated the major part of its revenue from the sales of marijuana through retail and convenience stores. Medicinal marijuana refers to the use of cannabis and cannabinoids for treating chronic pain and spasms in patients. The adoption of cannabis for diverse medical purposes have rapidly grown during the period 2013-2015. The legal medicinal marijuana market accounted for 75.26% of total marijuana market in 2015.
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Technavio media and entertainment analysts highlight the following four factors that are contributing to the growth of the global legal marijuana market:
- Technological advances in multiple domains of market
- Premium pricing due to high energy consumption in marijuana production
- Rising social acceptance of marijuana and growing business opportunities
- Increasing business sophistication
Technological advances in multiple domains of market
Ujjwal Doshi, a lead media and entertainment services analyst at Technavio, says, “Technological advances in all these operations coupled with the millennial generation's preference for marijuana for recreational purposes is expected to have a huge impact on the market's growth. With the increasing legalization of marijuana during the forecast period, it is important for vendors to engage with their customers, increase the production capacity and to comply with the legality of marijuana use in various countries.”
Premium pricing due to high energy consumption in marijuana production
The production of marijuana in in-house conditions is an extremely energy intensive process. In 2015, the electricity consumption accounted for 0.85% of the electricity output in countries where marijuana is legal. Electricity is mainly used to maintain optimal growing conditions for the plants like the generation of intense heat through indoor cultivation lights and operation of ventilation, cooling, and humidity management systems.
The prohibition and strict penalties imposed on the cultivation of marijuana have also considerably increased the selling price, which allows the vendors to recoup their costs on energy investments and maintain high-profit margins. Vendors are not very motivated to increase the energy efficiency of their operations because customers are willing to pay any premium amount to get the product.
Rising social acceptance of marijuana and growing business opportunities
The growth of the marijuana market has significantly increased the revenue for dispensary owners as well as cultivators and governments. In addition, the growing popularity of marijuana for recreational purpose is increasing the market competition and business opportunity for several vendors. Ancillary businesses such as cannabis oil market, hookah parlors, bubblers, volcano vaporizers and percolated bongs, THC-infused ice cream, and brownies are also profiting from the growing legal marijuana market.
Increasing business sophistication
“With more vendors entering the market, marijuana market is growing out of the emerging-business phase. The increased competition is expected to squeeze the profit margins which will result in the mid-stage companies refining their strategies,” adds Ujjwal.
The global marijuana industry is expected to grow rapidly during the forecast period with the focus shifting from developing operational standards of manufacturing marijuana to enhancing strategic priorities, including marketing and target areas. The importance of business intelligence is growing in all industries, including marijuana market. It will play a significant role in the marijuana market's growth as data-driven decision gain prominence. Decisions regarding retail location, pricing decisions, and product mixes will not be more empirical and not driven by instinct and anecdote.
- American Cannabis
- Medical Marijuana
- Mentor Capital
- Terra Tech
- United Cannabis
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