Legal cannabis industry forecast

Will we see marijuana startups take off?

We are in a time where societal norms are expanding to accommodate a more connected world. With this, many emerging industries are now providing great numbers of opportunities for entrepreneurs and investors. Among these is the legal cannabis industry.

Despite being polarising to many, this sector is quickly transforming. With such a wide variety of positive uses for consumers – from medical to recreational – it’s clear that the industry has billion-dollar potential. Read on to find out just how quickly the legal cannabis industry could grow on a global scale.

Quick overview

  • Globally, the legal cannabis industry is expected to double from $20 billion in 2020 to $43 billion in 2025
  • From 2018 to 2021, over $2.5 billion has been invested into cannabis startups
  • At 43%, millennials are the largest demographic of medicinal cannabis users
  • Medicinal cannabis is legal in 37 states in the US
  • Amsterdam earns over €400 million in tax revenue from cannabis coffee shops
  • The CBD industry is projected to generate £690 million in sales in the UK
  • 29% of the UK population have tried or are regular users of cannabis

    Industry projections

    Legal cannabis industry forecast

    The global legal cannabis industry is expected to double from 2020 to 2025, with over $43 billion to be spent on legal cannabis. With legalisation of cannabis slowly unfolding across the globe, there are several opportunities in the industry for cannabis startups and established organisations to add cannabis products to their stock in a bid to join this emerging industry.

    Year Legal cannabis spending worldwide from 2014 to 2024
    2017 $8.8 billion
    2018 $10.3 billion
    2019 $14.9 billion
    2020 $20.6 billion
    2021 $26.4 billion
    2022 $32.6 billion
    2023 $38.2 billion
    2024 $42.7 billion
    2025 $43.1 billion

    Medicinal use by generation

    According to a study on 1,000 cannabis dispensaries, the medicinal use of cannabis varies considerably from each generation. Millennials are the largest proportion of users of medicinal cannabis, with the substance having shown to be helpful in stabilising an individual’s mood, particularly in relation to anxiety and depression. Just 1% of users are of the silent generation, making those aged 75–95 the lowest percentage of users. This could be because this generation have lived through years of cannabis being stigmatised with long prison sentences. Millennials and generation Z make up 59% of medicinal users and there is even evidence of cannabis being important in tackling mental health problems.

    Age Percentage
    Gen Z 17%
    Millennials 42%
    Gen X 23%
    Boomers 17%
    Silent gen 1%

    Legal cannabis in the rest of the world

    illustration of legal cannabis product

    The US leads the way in legal cannabis production and consumption. After an extra 10 states legalised the sale of cannabis over the period of 2021–2022 and with over 141 million Americans living in these 18 states where it is legal, this is the largest population with access to the legal sale of cannabis.

    In Europe, Amsterdam is notoriously known as the “weed capital”, where the Dutch state reportedly earns €400 million from coffee shops in tax revenue. However, Amsterdam may experience a decline in cannabis tourism if legalisation of the substance is extended across the continent, with the novelty of coffee shops set to reduce if more countries open up to the cannabis industry.

    Year Legal cannabis revenue in Europe 2020–2025
    2020 $0.3 billion
    2021 $0.6 billion
    2022 $1.02 billion
    2023 $1.58 billion
    2024 $2.47 billion
    2025 $3.2 billion

    Employment in the North American cannabis market

    With the industry expected to grow considerably, job creation and growth will see an uplift with many new employment opportunities. With the current laws in place, it is estimated that from 2018–2025, jobs in the legal cannabis industry would have increased by almost half a million. However, if cannabis is legalised at a federal level, it is estimated that there will be just over 1.4 million more jobs in 2025.

    Year Employment with current legislation Projected employment with full federal legalisation
    2018 258,000 1,399,000
    2019 340,000 1,456,000
    2020 425,000 1,499,000
    2021 506,000 1,532,000
    2022 581,000 1,568,000
    2023 639,000 1,593,000
    2024 681,000 1,605,000
    2025 743,000 1,633,000

    Rise of cannabis distributors

    illustration of a cannabis delivery van

    In anticipation of the expanded decriminalisation of cannabis across the globe, many notable public figures have already invested in cannabis delivery distributors. Former Starbucks CEO Howard Schultz, NBA star Kevin Durant and DoorDash co-founder Stanley Tang have all invested into Dutchie, a cannabis ecommerce platform which raised over $200 million in a funding round that valued the organisation at $1.2 billion in 2021.

    Since 2018, it is estimated that over $2.5 billion has been invested into cannabis startups. With the industry being so new, this figure is likely to rise when laws regarding the decriminalisation of cannabis are changed.

    Cannabis in the UK

    In 2020, it was estimated that over 29% of the UK population had tried or were regular users of cannabis. With such a large proportion of the population having exposure to the currently illegal substance, there has constantly been demonstrations and calls for its decriminalisation across the nation.

    Have tried cannabis once in their lifetime Percentage
    Yes 29.40%
    No 70.60%

    Medical use of cannabis

    illustration of medical cannabis

    Cannabis was legalised in the UK for medicinal use in 2018, with supposed benefits ranging from the relief of chronic pain to slowing the development of degenerative diseases such as Alzheimer’s. Cannabis oil has also been shown to help address mental health illnesses such as depression and manage post-traumatic stress (PTSD).

    It is estimated that by 2024, annual medical cannabis revenue will reach over $1.2 billion (the current annual revenue stands at at $87,000) in the UK. With cannabis being seen as a treatment for many types of illnesses, there is likely to be an increase in organisations seeing the cost benefit of cannabis production and distribution.

    Date Active medical cannabis users in the UK
    2019 240
    2020 13,000
    2021 32,800
    2022 106,800
    2023 245,000
    2024 338,000

    The CBD boom in the UK


    The consumer cannabidiol (CBD) market is projected to generate £690 million in sales by the end of 2021. Such a high figure places the UK as the largest retail CBD market in Europe through big drives in consumer demand. Skincare products with CBD as an ingredient are becoming increasingly popular, with brands such as the Body Shop, Kiehls and many others adding CBD product ranges to their product market to meet the growing trend of cannabis-infused skincare.

    Sources used

    • Statista
    • Reuters
    • Flowhub
    • Forbes
    • Newfrontierdata

    For all media enquiries, please contact

    Matt Mckenna
    UK Communications Manager
    T: +44 20 8191 8806

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