COVID-19 Increases Market Volatility and Cannabis Proves Resistant to Recessionary Pressures
BOULDER, Colo., Sept. 23, 2020 (GLOBE NEWSWIRE) — Global cannabis sales for 2020 will reach $19.7 billion, an increase of 38% over 2019 sales of $14.8 billion—even reflecting the impact of the COVID-19 pandemic—according to updated market forecasts published by BDSA (formerly BDS Analytics), the leader in comprehensive, accurate and actionable cannabis market intelligence and consumer research. Over the longer term, BDSA predicts global cannabis sales will reach $47.2 billion by 2025, a compounded annual growth rate (CAGR) of 22%.
“While the 2020 forecast is down less than 1% from the forecast released earlier this year, cannabis sales YTD have swung wildly in different states as a result of COVID-19,” said Roy Bingham, Co-Founder and Executive Chairman of BDSA. “Sales in many U.S. markets performed stronger than expected, resulting in upward forecast revisions for Colorado, Illinois, Michigan, New Mexico, Oklahoma and Oregon, while sales in Nevada dropped significantly and are struggling to recover. Nevada’s dependency on tourism, coupled with mandated delivery for the adult-use channel were largely responsible for Nevada’s performance.”
U.S. government restrictions on cannabis continue to hamper growth with the FDA’s prohibition on ingestible CBD products weighing heavily on sales in critical channels such as grocery and drugstores. State-regulated dispensaries and alternative channels including convenience and e-commerce are taking advantage of this regulatory environment to build a first-mover advantage.
Downward pricing pressure across the largest markets is offset by the rapid adoption of cannabis products by new consumers, clearly indicated in BDSA’s research showing one-third of adults are open to, but not yet consuming cannabis regularly. New product formats and formulations are easing the exploration process for these cannabis Acceptors, posing both a risk and an opportunity for established CPG companies.
U.S. Market Update
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