US Cannabis Extracts Consumption is Impressive

The US cannabis extracts market size was valued at $7.3 billion in 2019 and is anticipated to register a Compound Annual Growth Rate (CAGR) of 16.6% over the coming years.

The key factors driving this Cannabis Extracts Market is the increasing adoption of medical marijuana for the treatment of chronic diseases like arthritis, Alzheimer’s and cancer along with mental disorders such as depression, anxiety, and epilepsy.

Another factor anticipated to propel the market growth is the rising legalization of medical cannabis in various countries that enables easy access to the consumers.

Increasing adoption of marijuana for medical and recreational purposes has been booming the overall market growth.

Legalization of marijuana in some countries has resulted into rising product purchase by legal means thereby, declining its black market sales.

Tax charged by the governments is also expected to create revenue generation opportunities for the countries.

Cannabis oil and tinctures are generally used for treatment of various conditions like psychological disorders, nausea, and cancer.

In terms of legality, laws pertaining to extracts are quite lenient due to non-psychoactive properties of Cannabidiol (CBD) oils compared to other products such as buds and resins.

Due to their easy consumption in vapour or in the form of gummies and slowly diminishing social stigma of smoking cannabis buds, these products are anticipated to gain momentum and the increase in demand in the forthcoming years.

Rising prevalence of cancer is also a crucial factor expected to drive the market for cannabis extracts.

According to the World Health Organization (WHO), in 2015, cancer was the second leading cause of deaths worldwide with around 8.8 Million deaths globally.

Increasing requirement of therapies related to pain management due to growing disease burden of chronic pain is anticipated to drive the medical marijuana market in near future. Moreover, due to age limitations and the exact calculation of dose, kids are prescribed cannabis oils instead of buds.

Insights into the Cannabis Oil Segment

The Cannabis oils segment held the largest revenue share in the cannabis extract market and was valued at $4.8 billion in 2019.

This is primarily due to increasing medical applications of the product.

Tracking the accurate consumption of prescribed dosage that includes Tetrahydrocannabinol (THC), CBD, and other components is crucial. Therefore, the preference for cannabis oils and extracts is comparatively higher as quantifying the accuracy through smoked cannabis.

Marijuana tinctures are consumed sublingually and are prepared by dissolving the drug in alcohol.

Tinctures can start working within 15 minutes, which is faster than oils which take around 45 minutes to start working. Therefore, the demand for tinctures is expected to witness significant rise of CAGR of 14.5% in the coming years.

Changing perspective of healthcare practitioners regarding safer ingestion techniques such as oral consumption or in the form of beverages or gummies is anticipated to drive the product demand.

The majority of producers have started expanding their portfolios in extracts, due to significant demand in end-use industries, such as pharmaceuticals, nutraceuticals, skincare, beverages, and edibles.

These products are marketed with the specific information on content of TCH, CBD, CBN or sole CBD for medical purposes.

Full Spectrum extracts Insights

Full-spectrum extract includes the complete cannabinoids range that can be extracted from a marijuana plant..

Full spectrum accounted for the largest revenue share in the cannabis concentrates market and was valued at $4.3 billion and is expected to grow 20% year over year.

There are more than 100 other cannabinoids present in their authentic forms apart from CBD.

Due to their availability, full spectrum extracts produce an entourage effect which is a collaborative relationship between terpenes and cannabinoids that intensifies the healing properties of cannabinoid.

Cannabis isolates are the most reliable forms of their respective cannabinoids and are obtained by isolation and extraction. They have comparatively lesser health benefits than full-spectrum cannabis extracts. Moreover, these isolates retain various advantages resulting in their rising adoption over the years. Their purest form tests negative for THC and possess no psychoactive effect owing to scarce/no THC content.

Due to strict regulations for THC in many countries, the adoption full spectrum or isolates is comparatively low.

Physicians are also prescribing the components of medical marijuana owing to its entourage effect. Moreover, the rising pressure of the medical community on the legal bodies to legalize the full spectrum products is anticipated to positively influence the demand for full spectrum extracts in the future.

Regional Insights

In 2019, North America held the highest revenue share and was valued at $6.4 billion owing to higher products adoption and its utilization due to legalization of marijuana in the region.

Ten years ago, the legalization was favored by 32% of the overall population and opposed by 60%. In 2018, medical marijuana was legalized in 30 states of U.S., including Guam, Puerto Rico, and Columbia. According to the recent statistics, about 57.0% adults in U.S. favor the use of marijuana for medical purposes like the treatment of pain, inflammation, and cancer. Therefore, factors such as legalization of cannabis, increasing support of the citizens, and rising product adoption for medicinal purposes will boost the regional market growth.

In 2019, Europe accounted for the second largest revenue share. Italy is regarded as the fourth largest consumer of cannabis oil and concentrates. However, the legalization in European countries, accompanied by stringent rules and regulations regarding the sale and cultivation, may limit the overall growth in Europe and in turn for the global market.

Other promising markets for marijuana are Australia, Germany, Poland, Colombia, Uruguay, and Israel.

Cannabis Extract Market Share Insights

Aphria Inc.; Canopy Growth Corporation; Aurora Cannabis; Maricann Inc.; Organigram Holdings Inc.; The Cronos Group; and Tilray, Tikun Olam, Ltd. are the major players that are operating in the cannabis market.

These players have established strategic partnerships with extractors and other parties in the value chain to significantly strengthen their market position.

Canopy Growth Corporation, for instance, partnered with Danish Cannabis ApS, and marked a new joint venture called Spectrum Denmark ApS. This venture aims at strengthening the foothold of the company in the European market.