by Peter Kusnic
October 9, 2019
Cannabis legalization is blazing across North America – from the 2018 Farm Bill freeing production and trade of industrial hemp in the US, to the 2018 Cannabis Act legalizing recreational marijuana in Canada. Additionally, eleven US states and the District of Columbia have legalized recreational marijuana, and more are expected to try (or try again) in the months and years ahead.
Among the biggest beneficiaries of the shifting legal landscape are manufacturers of the consumables and equipment used to cultivate, distribute, and sell cannabis, including such products as:
According to a new pair of Freedonia Group studies, the US and Canadian markets for these and other related products are on track to total US$4.8 billion in 2019, with robust growth expected through 2023 as licit markets continue to develop.
In the US and Canada, the legal definition of cannabis is divided into two groups: industrial hemp and marijuana. Hemp contains 0.3% (or less) of the psychoactive compound tetrahydrocannabinol (THC), while marijuana contains a higher concentration.
Growing supplies market conditions vary depending on the type of cannabis being produced, particularly as crosspollination risks necessitate that producers maintain separate operations for hemp and marijuana:
The highest expenses for licensed cannabis businesses occur at startup, when operators purchase the most costly equipment, such as regulation-mandated security systems. However, opportunities for growing supplies firms will be ongoing as:
Given the broad range of uses for hemp – from textiles to biofuels to bioplastics – it is produced in much greater quantities than marijuana, whose applications are limited to medical and recreational consumption. As a result, hemp accounts for a larger share of the North American market for cannabis growing supplies.
However, the higher cost of marijuana production levels the playing field somewhat. In Canada, for example, hemp represents virtually all cannabis production in the country, despite marijuana accounting for nearly half of national cannabis growing supplies sales.
Now available from the Freedonia Group, Cannabis Growing Market in the US and Cannabis Market in Canada analyze the North American market for consumables and equipment used to grow hemp and marijuana by product type, market (i.e., commercial and personal-use residential), and state/province. In addition to historical demand data and forecasts through 2028, the studies provide historical production data in dry pounds and US dollars and detailed overviews of the legal and regulatory environment at the federal and state/provincial levels related to industrial hemp, CBD and CBD-infused products, medical marijuana, and adult-use marijuana.
Peter Kusnic is a Content Writer with The Freedonia Group, where he researches and writes studies focused on the consumer goods and packaging industries.
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