Cannabis is poised to disrupt virtually every consumer industry, says a report by Euromonitor International. Currently, the total global market for cannabis, both legal and illegal, stands at $150 billion. Euromonitor International, a global market research company, predicts the legal market to grow to 77% of total sales, about $166 billion in 2025.
With the current pace of legalization, consumers will likely be able to use cannabis products in 2030 for their daily needs, from a pick-me-up beverage to cannabis toiletries.
A Look at the Cannabis Plant
All cannabis plants contain cannabinoids that interact with the human body’s endocannabinoid system. With more than 100 different cannabinoids out there, cannabidiol (CBD) and tetrahydrocannabinol (THC) are the most well recognized.
CBD is used as a medicinal ingredient in a variety of products from foods to cosmetics. THC, on the other hand, is the psychoactive ingredient that is illegal or restricted to medicinal use only.
Today’s functional cannabis ingredient of choice is CBD because it’s non-psychoactive and ultimately, legal. More consumers are looking into its potential use for anti-anxiety relief, pain relief, anti-nausea, anti-inflammatory and anti-spasmodic properties.
Cannabis regulation is divided into medical and recreational or “adult” use. Medical use is only legal by registering as a medical patient. Medical marijuana is legal in 33 U.S. states at this time. Recreational use allows cannabis products containing THC to be sold freely through a licensed outlet at a taxable price. Currently, recreational marijuana is legal in Canada and 10 U.S. states. Euromonitor International expects federal legalization of recreational cannabis in the U.S. within the next 10 years.
How Will Legal Cannabis Impact Fast Moving Consumer Goods (FMCG) Markets?
Spiros Malandrakis, head of alcoholic drinks research at Euromonitor International, believes cannabis should either be embraced as a symbiotic opportunity or faced as a potentially detrimental antagonist for an alcohol industry already on the defensive.
At this time, alcoholic drinks are by far the most embedded industry in the cannabis sector. At least three leading corporate players have a stake in cannabis producers.
The global soft drinks industry is being driven more and more by the health and wellness trend. CBD-infused products are becoming more popular in soft and hot drinks.
The report says the declining popularity of sugary drinks opens up doors for cannabis beverages that fit into social settings with a health and wellness element.
The tobacco industry may be hit the hardest by the cannabis industry. But Shane MacGuill, head of tobacco research at Euromonitor International, says by 2030, the vaporization of cannabis alongside consumption in a plethora of other formats will drastically change expectations of consumers with respect to delivery of nicotine.
The tobacco industry has a unique opportunity because it understands the restrictive legislation, taxation and the agricultural production chain.
Beauty and Personal Care
Hemp seed oil beauty and cosmetics have been on the market for many years. However, CBD is stealing the limelight now, promoting its anti-oxidizing, oil-balancing and anti-inflammatory properties. As health becomes a more important part of beauty and personal care product strategies, experts believe cannabis may become a mainstream ingredient in the not-so-distant future.
The global market for vitamins and dietary supplements is predicted to be the largest cannabis over-the-counter market by 2025, Euromonitor International reports. They predict 2% of total value sales expected to be CBD- or THC-based, followed by topical analgesics, sleeping aids and sports nutrition.
“The mainstreaming of cannabis will open the consumer health space up to untold innovation and experimentation,” says Matt Oster, industry manager of consumer health at Euromonitor International. “Though CBD is already in demand, we haven’t scratched the surface of potential applications for the ingredient.”
Hemp-based food products are not new to the shelves of health food stores. Global sales of CBD-packaged foods are expected to double over the next two years as consumers learn more about the ingredient’s benefits, the report says.
Most CBD food products are concentrated in sweet categories but will likely expand to become more prevalent in food categories such as bakery products, savory snacks, pasta and soups.
The fast-acting companies will have the advantage in the marketplace. Euromonitor International says by 2030, the companies who react early will have their own everyday cannabis brands as cannabinoids morph into a variety of products across these FMCG markets.