The Growth and Potential of the Global Cannabis Industry
The cannabis industry outside of the United States is experiencing a growth trajectory similar to what was seen in the U.S. during its early stages. In our previous article, we explored how recreational cannabis markets are expanding the consumer base beyond just daily enthusiasts. More people are using cannabis for various reasons, from recreational enjoyment to medical purposes.
As different regions across Europe, Latin America, Africa, Oceania, and Asia embrace cannabis in their own ways, regulatory reforms play a significant role in shaping the industry. Each part of the world is navigating its path to cannabis acceptance and regulation at its own pace.
A Global Overview of Cannabis Regulations
Europe is seeing a surge in the acceptance and legalization of medical and recreational cannabis. Countries like Germany, Malta, and Luxembourg are making strides towards establishing regulated cannabis markets. The European Union’s evolving stance on CBD as a novel food is also shaping the industry, offering new growth opportunities.
Latin America has been a leader in cannabis regulatory reform, with Uruguay and Colombia paving the way for legalization. Mexico, Brazil, and Argentina are also progressing towards a more open cannabis market, showcasing significant growth potential in the region.
Africa is slowly opening up to cannabis cultivation, with countries like South Africa, Lesotho, and Zimbabwe making regulatory advancements. Despite challenges, Africa’s cannabis industry is poised for growth and international investment.
Oceania has been at the forefront of medicinal cannabis, with Australia and New Zealand expanding their programs. These regulatory developments, combined with research and trade opportunities, position Oceania as a hub for cannabis innovation.
Asia presents a complex landscape for cannabis regulation, with countries like Thailand and Japan taking tentative steps towards legalization. As attitudes towards cannabis evolve, Asia could unlock significant growth opportunities in the coming years.
The Growth Outlook on a Global Scale
Based on current trends and legislative reforms, we project annual growth rates for different regions in the global cannabis industry. Europe and Oceania show strong short-term growth potential, while Latin America, Africa, and Asia present promising long-term prospects, contingent on overcoming regulatory hurdles.
Projected Annual Growth Rates
| Region | 1-Year Growth Rate | 5-Year Growth Rate | 10-Year Growth Rate |
|---|---|---|---|
| Europe | 9% – 13% | 21% – 25% | 19% – 23% |
| Latin America | 8% – 11% | 19% – 23% | 23% – 27% |
| Africa | 7% – 9% | 15% – 20% | 20% – 24% |
| Oceania | 10% – 15% | 23% – 27% | 21% – 25% |
| Asia | 5% – 10% | 13% – 17% | 18% – 22% |
Investors and policymakers can use this information to navigate the expanding cannabis market. While the U.S. remains a dominant player, international markets offer substantial growth opportunities. Keeping an eye on regulatory changes and market dynamics is key to capitalizing on the global cannabis industry’s potential.
If you found this post insightful, subscribe to Enterprising Investor and the CFA Institute Research and Policy Center for more updates.
Disclaimer: The views expressed in this post are the author’s own and should not be taken as investment advice. The opinions expressed do not necessarily reflect those of CFA Institute or the author’s employer.
Image credit: ©Getty Images / Rudenkoi
Professional Learning Resources for CFA Institute Members
CFA Institute members can track their professional learning (PL) credits, including content from Enterprising Investor, using the online PL tracker. Stay informed and earn credits effortlessly!
Suggested Reading
Explore more insights on the global cannabis industry from reputable sources:
- How Cannabis is Shaping New Global Markets! – Barneys Farm
- Africa Is Keeping Up With Cannabis And More Global Weed Reform Efforts – Benzinga
- Columbia’s Legal Cannabis Industry Faces Regulatory, Political Challenges – Cannabis Butter Digest
- European Drug Report 2023: Trends and Developments – EMCDDA
- New Report Projects Global Recreational Cannabis Market to Nearly Double by 2027 – High Times
- Emerging European Cannabis Market and Its Impact on Global Dynamics – Marijuana Index
- Global Cannabis Market Trends for 2023 – MJ Biz Daily
- Various Reports on Cannabis Markets – Prohibition Partners
- World Drug Report 2023 – UNODC