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Marijuana sales in the world will grow 38% to $ 16.9 billion in 2019 – The Motley Fool



Marijuana might not have had a remarkable year in 2018, but the cannabis industry was making waves like never before. When the curtain closed, Canada became the first industrialized country in the world to give green light to the relaxing weeds, paving the way for billions of dollars in legal annual sales and pulling cannabis from the shadows and focus as a valid business model.

We have also witnessed a lot of history made in the United States. In December, President Trump signed the Farm Act legalizing cannabis and hemp products from across the country. In addition, the US Food and Drug Administration approved its first cannabis drug and several countries legalized the pot in some capacity. Approximately two-thirds of all countries have already legalized medical cannabis, with 1

0 of these countries also allowing for adult consumption.

In other words, this is a fast-growing industry – and the business is about to rise.

  One hand that keeps cannabis leaves the world.

Source: Getty Images

Global marijuana sales could reach $ 17 billion in 2019

According to a report ("A Majority Markets Legal Statement of 2019"), published Monday, January 15, Consumer Cannabis Global Consumer Expenditure is expected to grow 38% in 2019 to 16.9 billion dollars, compared with the estimated $ 12.2 billion in 2018, $ 9.5 billion in 2017 and $ 6.9 billion in 2016 between 2017 and 2022 is expected to reach 26.7%, and the report calls for $ 31.3 billion in global sales of marijuana in 2022

Interestingly, the global sales estimate of Arcview & BDS Analytics for 2018 is slightly below previous estimates that were issued at that time last year. Initially, Canadian Prime Minister Justin Trudo was trying to release a relaxing weed on July 1, 2018, but the adoption of the Cannabis Act did not happen until mid-June. The delay of three and a half months of the release of adult marijuana in Canada, coupled with an initial supply shortage caused by bureaucracy (eg License for Growing and Approval for a Sales Permit), is one of the reasons for their global sales forecast [19659002] Another factor that adversely affected global sales in 2018 was delivery problems in California. A number of manufacturers have produced cannabis excessively, cutting the cost per gram, while the regulatory bureaucracy in the dispensary approval process has delayed the opening of new outlets.

It is expected, however, that 2019 will be a different story.

  Two rows of cannabis buds, partially covering tidy hundred dollar banknotes.

Image Source: Getty Images. Growth Drivers

As can be expected, legalization of cannabis in different US states and other countries around the world is likely to be one of the largest sales catalysts. In the United States, both in New Jersey and New York appear to be on the brink of legalization within their respective legislation. This happened after the Michigan voters decided to approve proposal 1 at the mid-term elections in November, legalizing marijuana for entertainment.

Looking abroad, there are many opportunities for Mexico to progress with legalized adult marijuana, and for a number of Asian countries to adopt laws on medical cannabis. Legalizations will lead to further growth, which is why Arcview and BDS Analytics are already calling $ 31.3 billion in global sales by 2022.

Do not overlook the expansion of legalized consumption options in Canada. When the Cannabis Act was adopted, only dried flowers, sublingual sprays and cannabis oils were legalized. Other forms of consumption, such as food products, topical beverages, cannabis-flavored drinks and drinks, have not received green light. But according to a project published by Health Canada in December, these new options will be legalized for sale next fall and no later than the one-year anniversary of Canada's holiday legalization, Oct. 17.

Another reason why weed sales could rise in 2019 is the expectation that some supplies will develop on their own. For example, California is likely to see the oversupply of its pot as new legal dispensaries are open to business. At the same time, Canadian healthcare's ability to manage through marketing authorization and sales permits should allow more products to hit the dispenser shelves.

Finally, do not give up the demarcation between branded beverages, tobacco and pharmaceutical companies, and cannabis business. Larger beverage, tobacco and pharmaceutical companies are looking to diversify their product portfolios and increase their growth. Partnership or investment in pot stocks can be this answer and lead to increased revenue.

  A hand holding cannabis leaves in the middle of a weed farm.

Image Source: Getty Images. for a large piece of cannabis pie

Aurora Cannabis (NYSE): ACB (NYSE: CGC) and ) will be at the top of the package, though for various reasons.

Aurora Cannabis is expected to be the dominant player as a result of its superior production potential. Although Aurora's press releases will reduce that peak annual output to "over 500,000 pounds," the company is more than 700,000 pounds a year when it is in full capacity after the acquisition of ICC Labs in South America for about $ 221 million. If Aurora Cannabis decides to develop fully leased and own land adjacent to existing facilities, it could increase its annual yield north of 1 million pounds.

Although it is unclear what is the maximum production potential in Canada, Aurora Cannabis can ultimately be from 15% to 20% of the total production of the country. Keep in mind that not all of this weed will be swallowed by the Canadians. Rather, it will be exported to countries where medical marijuana is legal.

Meanwhile, Canopy Growth is expected, which is likely to become the second-largest producer with over 500,000 kilograms of annual peak. rely on its superb sales channels, branding and partnerships to boost sales growth.

  Cannabis plants in a pot to a bottle of wine.

Image Source: Getty Images

In November, Modelo and Corona beer maker Constellation Brands closed a Canopy investment of $ 4 billion, giving it a 37% biggest pot in the world. This cash infusion should be important for Canopy Growth to fulfill its business strategy, which includes moving to new international markets, developing additional alternative cannabis products, and making additional acquisitions. Canopy Growth announced that it will invest $ 100 million in the past week, up to $ 150 million in a hemp processing plant in southern New York, after obtaining a license from the state.

The most famous Cannabis brand all over Canada (Tweed) and the most advanced sales channels (both physical and online) to move this product from the field to the user.

Although the cannabis industry is built on the hopes of thriving small businesses, we will not be surprised that this duo is leading to an increase in the growth tax in 2019 and absorbs its market share.


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