Industry Insights
The U.S. medical cannabis market size was valued at USD 5.44 billion in 2016. The medical marijuana market is at the nascent stage of development and is expected to grow significantly during the forecast period owing to rising consumer demand.
U.S. medical cannabis market, by usage, 2014 - 2024 (USD Billion)
In 2016, Washington D.C. together with other 28 states legitimated the use marijuana for medical purpose. California, Colorado, Washington, Arizona and Michigan are few of the cannabis approved states in the U.S. Moreover, the number of states receiving approval to consume marijuana for medical use is expected to grow substantially; hence the market is expected to flourish over the forecast period.
In 2015, the Medical Marijuana Regulation and Safety Act permitted hemp cultivation, transport, distribution, delivery, and testing of medical cannabis at the state and local level. This has resulted in the massive requirement in the medical field owing to increasing signs of benefits such as curbing body pain, reducing carcinogenic effect caused by tobacco, epileptic seizure control, anxiety control, and hepatitis C.
In 2015, federal investment in medical marijuana research saw a significant shift and numerous institutes have been undertaking studies to explore its therapeutic potential. The growing demand for the herb is anticipated to add pressure on states and regulatory bodies for legalisation across the country. This is expected to lower entry barriers for new players over the next few years. The other industry trends include price wars, competition, integration of technology and innovative product development. The cannabis industry is expected to witness evolution over the forecast period.
Uncertainty towards the legalisation of cannabis in the medical and recreational uses is expected to pose a challenge for the growth of the market. Consumer attitude towards the herb is continuing to shift positively every year owing to its acceptance and medical benefits.
Segmentation by Usage
• Chronic
• Arthritis
• Migraine
• Cancer
• Others
Proposal of legalising marijuana for medical use in U.S. has seen a rise in state and public funding making U.S a growing and affluent in the industry. However medical cannabis cultivators continue to benefit from the increasing ageing population owing to greater consumer acceptance and demand.
In 2016, chronic pain was the largest segment owing to the presence of a large number of patients. Rising number of patients diagnosed with chronic pain has resulted in increasing the use of cannabis as the dosage required to treat pain is much lower than other drugs.
Arthritis has over 100 different types of related conditions and is anticipated to grow over the next few years on account of increasing ageing population and lifestyle-related issues resulting in joint pains, inflammation and cartilage degeneration. In the U.S it's estimated that more than 50 million adults and 3 million children have arthritis. The demand for medical marijuana for arthritis is expected to grow at a CAGR of 17.8% over the projected period.
Segmentation by Consumption
• Solid Edibles
• Inhalation
• Liquid Edibles
• Topical
New product development has transformed the landscape of the market in the U.S. over the past few years. Cannabis infused solid edibles were widely used and the segment expected to grow at a CAGR of 17.8% over the forecast period.
Liquid edibles were valued at USD 0.80 billion in 2016 and are expected to witness the fastest growth over the projected period. The herb is infused in coffee, spiced apple cider vinegar, and root beer. Since their launch, these products have been gaining tremendous popularity which is expected to fuel the growth of the market.
Segmentation by State
• California
• Colorado
• Washington
• Arizona
• Michigan
Being the very first state to legalise marijuana, California has been leading the U.S market. California recorded the highest revenue share accounting for 45.4% in 2016. Market saturation, as well as the legalisation of other states in the country, is expected to result in a sluggish growth of the market in the state.
Michigan is expected to witness tremendous growth over the projected period on account of increasing awareness regarding the benefits of the herb for medical applications. The market is projected to grow at a CAGR exceeding 17% over the forecast period.
Competitive Landscape
Numerous companies have entered the industry post the legalization of cannabis and implementation Medical Marijuana Regulation and Safety Act, in 2015. In the coming years, it is expected that numerous agriculture, tobacco, alcohol and pharma companies are likely to wade into the market. Key players operating in the industry include American Cannabis Industry includes Canopy Growth Corporation, Greegro Technologies, Medical Marijuana Inc, United Cannabis, Terra Tech Corp, Cannabis Sativa Inc and Green Solutions.
