Cannabis Market Size & Share Analysis - Growth Trends and Forecast (2026 - 2031)

Global Cannabis Market Trends and Insights

Rapid Adult-Use Legalization in the United States and Germany

Germany’s Cannabis Act took effect in April 2024, decriminalizing possession of up to 25 grams and home cultivation of three plants, laying the foundation for a commercial system that could serve 4.5 million adults once retail licensing begins in 2026^{[1]Source: Bundesgesundheitsministerium, “Cannabis Act Factsheet,” bmg.bund.de}. In the United States, Ohio and Minnesota launched adult-use sales in 2024, increasing the number of Americans living in jurisdictions with legal cannabis to 155 million^{[2]Source: United States Centers for Disease Control and Prevention, “Prescribing Practices Overview,” cdc.gov}. Border states such as Wisconsin and Pennsylvania began debating similar bills to prevent tax leakage. Brazil’s regulator registered 215,000 medical patients by December 2024, signaling momentum for wider access throughout South America. These policy shifts are expanding the cannabis market by lowering legal barriers and encouraging investment.

Surge in Medical Prescriptions for Chronic-Pain Management

Physicians are shifting away from opioids toward cannabinoid therapies following updated clinical guidelines. Australia issued 420,000 prescriptions in 2024, up from 250,000 in 2023, with chronic pain accounting for 62% of the indications. Israel exported 12,800 kilograms of pharmaceutical-grade flower to Europe in 2024 to meet rising demand. United States patient registrations surpassed 7.2 million by mid-2025, while Jazz Pharmaceuticals Public Limited Company logged USD 710 million in Epidiolex sales in 2024, proving that payers reimburse evidence-backed cannabinoid drugs. Geriatric segments are showing the highest growth as clinicians seek non-addictive pain management options.

Commercial Rollout of High-THC Premium Flower SKUs

Premiumization lifted average selling prices across mature markets in 2024. Canadian micro-cultivators priced craft strains at CAD 15–CAD 18 (USD 11–USD 13) per gram, which is twice the mainstream level, yet they secured 18% of the dried-flower revenue^{[3]Source: Statistics Canada, “Monthly Cannabis Retail Prices,” statscan.gc.ca}. Curaleaf Holdings Incorporated expanded its “Reserve” line above 30% THC, which represented 22% of its flower sales in the fourth quarter of 2024. Colombian grower Clever Leaves Holdings Incorporated shipped “Single-Origin” flower to European pharmacies at EUR 12 (USD 13) per gram, capturing premiums for traceability. These moves enhance margins and differentiate brands.

Multinational Consumer-Packaged-Goods Brand Entries

Large beverage and tobacco firms are bringing capital, logistics, and brand management into the cannabis market. Tilray Brands Incorporated launched “Mollo” drinks in Canada through a 12,000-store beer network and captured 14% of the beverage category within six months. Molson Coors Beverage Company and HEXO Corporation shipped 2.1 million units via their Truss joint venture in 2024. Altria Group Incorporated’s USD 1.8 billion investment in Cronos Group Incorporated fueled the launch of “Spinach” vape across 1,200 Ontario stores. Deep distribution adds scale that pure-play cannabis firms lack.

Patchwork of Advertising Bans Across Major Markets

Stringent marketing restrictions hinder brand-building and consumer awareness. In Canada, the Cannabis Act bans testimonials and youth-targeted content. Germany's 2024 Cannabis Act limits the visibility of ads to minors. In the United States, regulations vary, as California allows limited billboards, while New York bans outdoor ads. These rules increase customer acquisition costs, with Trulieve Cannabis spending USD 68 million in 2024, resulting in a cost per new customer of USD 127. Limited advertising creates information gaps, commoditizing the market and undermining premium positioning.

Shortage of Pharmaceutical-Grade Cultivation Capacity

The demand for European Union Good Manufacturing Practice (EU-GMP)-certified cannabis exceeds the supply, resulting in delays. By December 2024, only 47 facilities globally held EU-GMP certification, mainly in Israel (12), Canada (10), and the Netherlands (8), with Germany operating 3 sites. EU-GMP compliance requires significant capital, averaging USD 25 million per facility. In 2024, Australia's domestic production met only 60% of demand, forcing imports at 40% higher costs. Germany consumed 32,000 kilograms of medical cannabis in 2024, with new cultivation licenses delaying harvests until late 2026. Wholesale EU-GMP flower prices ranged from EUR 8 to EUR 12 (USD 9 to USD 13) per gram, double the cost of non-certified products.

Segment Analysis

By Product Type: Flower Dominates While Beverages Accelerate

Flower retained 42.5% of the cannabis market size in 2025, benefiting from low production costs and legacy user habits. Beverages, although still a small slice, are the fastest-growing line, with a 14.6% CAGR through 2031, driven by consumer-packaged-goods partnerships that leverage cold-chain logistics and flavor R&D expertise. The cannabis market for premium drinks is expanding as retailers allocate shelf space previously dedicated to craft beer, signaling a convergence in formats. 

Flower’s cost advantage, indoor yields of 65 grams per square foot versus 35 grams for greenhouse crops, anchors pricing power even as health-conscious buyers drift toward smoke-free options. Beverage penetration is advancing fastest in Canada and California, where regulations allow micro-dosing and familiar single-serve packaging that appeals to new consumers. Cross-promotions with alcohol brands, such as Tilray Brands Incorporated’s craft-beer tie-ins, amplify awareness without violating marketing bans. Concurrently, terpene-rich flower SKUs above 30% THC maintain niche loyalty and support the overall cannabis market for dried products by attracting connoisseur buyers who value flavor and potency.

Note: Segment shares of all individual segments available upon report purchase

By Compound: THC Commands Value, CBD Drives Volume Growth

THC-dominant formats controlled 63.0% of the cannabis market share in 2025, making them the largest compound group within the cannabis market. CBD-dominant items drive growth at a 14.5% CAGR through 2031 as wellness shoppers favor non-psychoactive benefits and mainstream retailers gain confidence in European Union novel food clearance. CBD gummies and capsules on German drugstore shelves tripled unit velocity in six months, illustrating latent demand once legal clarity arrives. 

THC retains pricing power, with a wholesale price of USD 6.80 per gram, versus USD 2.10 for industrial-hemp CBD isolate, due to its potency and cultivar scarcity. Balanced 1:1 ratios appeal to medical users seeking entourage effects, but limited agronomic yields gate their expansion. As cannabinoid separation costs fall, hybrid formulations could erode THC’s dominance, yet psychoactivity will keep it the linchpin for recreational revenue streams. Investors are diversifying cultivation toward high-CBD hemp acreage to hedge regulatory risk and tap export-friendly nutraceutical channels, reinforcing two-track growth across compounds.

By Usage: Medical Leads, Adult-Use Expands Rapidly

Medical applications held 56.8% of 2025 sales, reflecting physician trust in standardized dosing and insurance coverage for chronic pain. Adult-use, however, is the fastest segment at a 14.4% CAGR through 2031 on the back of new legalization waves in the United States Midwest and Germany’s open-market timeline. The cannabis market for medical patients is resilient because chronic conditions require continuous therapy, driving annual spends that triple recreational baskets. Yet, retail data from Ohio show that 62% of first-time adult-use buyers convert to repeat customers within three months once registration barriers are removed. 

Germany’s social-club model is anticipated to blur lines, as members often purchase for therapeutic self-care outside a prescription pathway. Payers are monitoring real-world evidence from these programs, which may inform future reimbursement decisions and potentially narrow the gap between channels. As the overlap increases, patients who self-select for adult-use due to price or privacy concerns will keep both segments intertwined, with cross-channel promotions likely to emerge once banking restrictions are eased.

By Distribution Channel: Dispensaries Rule, Online Direct-to-Consumer Surges

Licensed dispensaries captured 58.1% of the 2025 turnover, due to state mandates that require psychoactive sales to be funnelled through brick-and-mortar outlets. Online direct-to-consumer is the fastest-growing channel, with a 14.2% CAGR through 2031, enabled by age-verification software, click-and-collect models, and pandemic-driven delivery habits. The cannabis market for e-commerce in Ontario increased significantly in 2024, with 4.2 million orders resulting in an average basket value of CAD 94 (USD 71), 22% higher than for walk-in equivalents. Dispensaries are responding by adding drive-through windows and self-checkout kiosks that cut queue times by 18%. 

Pharmacies remain critical in medical programs, but hybrid retail, pharmacist-staffed counters inside dispensaries, are emerging in Germany to satisfy both compliance and convenience. Mass-market chains, such as Edeka, utilize existing loyalty programs to promote CBD beverages, suggesting that mainstream grocers could become significant players once regulations permit higher THC ranges. Data integration between point-of-sale and blockchain traceability is also improving re-order accuracy and elevating the customer experience across channels. 

Note: Segment shares of all individual segments available upon report purchase

Geography Analysis

North America accounted for 73.0% of the cannabis market's 2025 revenue, as the United States now has 155 million adults living in legal jurisdictions, and states such as New Jersey are rapidly scaling up their supply. Canadian operators face price compression, but offset it with export licenses to Germany and Australia. Mexico’s stalled legislation keeps a potential USD 3 billion addressable market on hold, yet gray-market demand signals a pent-up opportunity. Consumer behavior is segmenting wherein seasoned users seek high-THC craft flower, whereas new entrants gravitate to beverage micro-doses and vape pens that emulate nicotine products.

Europe is advancing as Germany’s April 2024 reform catalyzes neighboring countries to reassess their policies. Imports filled 32,000 kilograms of German medical demand in 2024, but domestic crops under new licenses will not reach shelves until late 2026. Spain’s 1,200 social clubs remain semi-legal yet support a steady influx of tourists, while the Netherlands’ pilot aims to eliminate illicit supply chains by demonstrating that regulated cultivation can meet volume and quality targets. 

The Asia-Pacific region is projected to be the fastest-growing region, with a 14.8% CAGR through 2031, supported by Australia’s 420,000 prescriptions in 2024, which revealed strong practitioner participation. New cultivation projects in Queensland, Australia, also aim to slash reliance on imports. Japan and South Korea still enforce strict bans, creating a polarization where some markets leap ahead while others lag. Thailand’s regulatory flip-flop sparked legal confusion, yet black-market prices fell 27.0% in Bangkok as oversupply met uncertain rules, hinting at the elasticity of demand. South America and the Middle East add complementary growth layers.