Authored By: Sarah
22 Jan 2025

The US Cannabis Market Outlook: Growth and Dynamics (2024-2028)

The cannabis industry in the United States is on an accelerated growth trajectory. With projections indicating a market size expansion of USD 89.50 billion by 2028, driven by a compound annual growth rate (CAGR) of 32.14% between 2023 and 2028, the US cannabis market is poised to transform both recreational and medical sectors. This rapid growth is fueled by several factors, including an increasingly millennial-driven consumer base, rising support for cannabis legalization, and expanded medical cannabis dispensary networks across the country.

Cannabis market in us 2024-2028

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US Cannabis Market Overview and Segmentation

Derivative Type Outlook:

  • CBD (Cannabidiol): The CBD segment will maintain a dominant position in the US cannabis market. With hemp-derived CBD oil being federally legal, it continues to gain widespread acceptance across the nation. Several states such as Georgia and Indiana have specifically legalized hemp-based CBD oil for medicinal use.
  • THC (Tetrahydrocannabinol): THC-based products also remain highly popular, especially among consumers seeking recreational cannabis experiences.
  • Balanced THC and CBD: Products that balance both cannabinoids are becoming more popular, meeting the needs of medical users who require therapeutic effects without the psychoactive high of pure THC.

Product Outlook:

  • Medical Cannabis: The medical cannabis segment is expected to see significant growth during the forecast period. As of April 2023, 38 states, three territories, and the District of Columbia allow the medical use of cannabis products. The rise of state approvals, combined with more medical marijuana dispensaries opening across the country, will continue to bolster this market.
  • Recreational Cannabis: As legalization continues to gain momentum, the recreational cannabis market is experiencing an uptick, driven by millennials' increasing acceptance of cannabis use.

Regional Outlook:

  • US

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Key Drivers of Growth

  1. Millennial Support for Legal Cannabis: As of 2021, 36.4 million people in the US aged 12 or older are using cannabis, with millennials driving this adoption. This demographic is fueling the demand for both medical and recreational cannabis, particularly in states with evolving legal landscapes.
  2. Health Benefits and Therapeutic Uses: Increasing recognition of the health benefits of cannabis, particularly in managing chronic pain, nausea, anxiety, and epilepsy, is pushing more consumers toward both medical marijuana and CBD-based products. The FDA’s approval of prescription cannabinoid medications like Epidiolex is expected to further boost the market’s expansion.
  3. Government Regulation and Legalization: With more states legalizing cannabis for medical and recreational purposes, the market’s reach is widening. Federal legalization of hemp-derived CBD oil has also opened up new market avenues.
  4. Research and Development Investment: The US government has ramped up funding for cannabis research, particularly for medical marijuana’s potential uses. This trend is supported by institutions like the National Institute on Drug Abuse (NIDA), which has requested significant funding to investigate the full range of marijuana’s medical applications.

Challenges Impacting Market Growth

  1. Accessibility and Legal Barriers: Despite growing cannabis acceptance, accessibility remains a significant challenge. Many states require patients to have an active medical marijuana card, and cannabis is not yet covered by insurance. These restrictions make it harder for consumers to purchase cannabis in a convenient and affordable manner.
  2. High Prices: While cannabis consumption is increasing, prices remain a barrier for some consumers, particularly for medical cannabis products, which are often sold at premium prices. Additionally, the lack of insurance coverage for these products makes them less affordable for the average consumer.

Key Market Trends and Innovation

  1. Research Funding for Medical Marijuana: The US cannabis market is witnessing increased funding for research into cannabis' therapeutic benefits. Government organizations like NIDA are supporting this research, with an estimated USD 1.9 billion allocated for 2022. This funding is expected to stimulate product development and expand the medicinal cannabis market.
  2. Technological Advancements: From the cultivation of hybrid cannabis strains to the use of artificial intelligence in optimizing cultivation and extraction methods, the industry is advancing rapidly. Innovations are also occurring in the realm of cannabis edibles, infused beverages, and vapes, as well as cannabis testing and cannabis packaging solutions that cater to evolving consumer preferences.
  3. Consumer Trends: The preference for cannabis-infused products, such as edibles, beverages, and topicals, is increasing, with consumers seeking a broader array of consumption options. Cannabis concentrates like oils, waxes, and live resin continue to grow in popularity, particularly in recreational markets.

Major Players in the US Cannabis Market

Several companies are dominating the US cannabis market, each offering a range of products and expanding their presence. Some of the key players include:

  • Aurora Cannabis Inc.
  • Canopy Growth Corp.
  • Charlottes Web Holdings Inc.
  • Columbia Care Inc.
  • Cresco Labs LLC
  • Cronos Group Inc.
  • Curaleaf Holdings Inc.
  • Folium Biosciences
  • Green Roads.
  • Jazz Pharmaceuticals Plc
  • Lexaria Bioscience Corp.
  • Medical Marijuana Inc.
  • MM Enterprises USA LLC
  • Pure Spectrum CBD
  • Sundial Growers Inc.
  • Terrascend Canada
  • Tilray Brands Inc.
  • Trulieve Cannabis Corp.
  • Unrivaled Brands Inc.
  • Verano Holdings LLC

 These companies, along with emerging players, are leveraging strategic alliances, acquisitions, and product launches to stay ahead of the competition.

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