Request for Free Sample

Legal Cannabis Market Report Scope & Overview:

The legal cannabis market size was valued at USD 22.16 billion in 2024 and is expected to reach USD 138.08 billion by 2032, growing at a CAGR of 25.75% over the forecast period of 2025-2032.

The global legal cannabis market is growing robustly due to normalization and the increasing legalization for both medical and recreational purposes. From the therapeutic value acknowledged by governments to shifting societal attitudes and an expansion of R&D, providing further opportunities for new applications. Technological developments on the cultivation and processing side, along with high investor interest, are helping to stimulate market development even further. The growth of cannabis derivatives in food, beverage, and pharmaceutical sectors is further catalyzing market uptake in mature and developing economies.

The U.S. legal cannabis market size was valued at USD 29.15 billion in 2024 and is expected to reach USD 144.15 billion by 2032, growing at a CAGR of 22.15% over the forecast period of 2025-2032.

The legal cannabis market in North America is driven by the U.S., with nearly two-thirds of states allowing some form of medicinal or recreational use. The broad demand by consumers, vigorous investment activity, and increasing number of licensed dispensaries are also cementing its leadership status in the region.

Cannabis sales across the U.S. exceeded USD 2billion in 2024, with Illinois leading the way, making it a record year for the state with forecasted tax revenue exceeding USD 490 million, and  both statistics proving the strong economic returns from legalization programs.

Market Dynamics:

Drivers

  • Increasing Legalization in Countries is Fueling the Market Expansion

One of the key drivers for the legal cannabis market growth is the gradual legalization of cannabis for medical and recreational purposes. Several, including the U.S. or Canada, Uruguay, and Germany, among others, have created laws to legalize and tax the sale of cannabis. Such a transition does not just broaden the customer reach, but also provides legitimacy to the sector, which helps in translating that enterprise on a large scale, strengthening the supply chain and retail infrastructure. The legal frameworks, which have been making people less dependent on the black market, have finally allowed licensed players to benefit from more revenue.

Furthermore, it encourages knowledgeable use, responsible consumption, and quality regulation. With improving sentiment coverage, more jurisdictions will likely get on board, which will continue to drive market growth.

A ScienceDirect study shows that in the five years after Canada legalized recreational cannabis, the legal market reached about 78% of total cannabis sales within Canada, with dried flower (marijuana) making up nearly 60% of legal cannabis purchases.

Liberals liked that liberalisation allowed the underground market's grip to loosen, provided several billion euros in tax income, but grew only slightly in total usage of all kinds of channels, even more.

  • Product Innovation and Broadband Devices are Driving the Market Growth

Cannabis is a product that gets taken in various ways, and cannabis companies are innovating on the ways by which cannabis is consumed in innovative ways, which are beyond smoking in traditional ways. Different types of goods are being produced by different brands including THC- or CBD-infused beverages, chocolates, gums, skin-care products, and even wellness supplements. The ability to diversify the product offering, often with a well-established brand identity and aesthetically sustainable packaging, attracts health-conscious, curious, and overall lifestyle consumers, allowing businesses to access mainstream markets and grow their clientele.

This type of innovation also allows for micro-dosing and precision formulations, opening cannabis up to neophytes and medical patients alike. This evolution is changing the way consumers expect to interact with and adopt new products.

For instance, Curaleaf introduced Select FormulaX, an energy drink from hemp-derived THC blended with caffeine and cannabinoids, extending into this new beverage category (functional beverage category extension) while also offering a new format of a drinkable product (format innovation).          

Restraints:

  • Market Growth is Restrained Due to Regulatory and Legal Uncertainties

Over the years, many countries and U.S. states have legalized medicinal and recreational cannabis, yet a patchwork of inconsistent federal laws still exists, resulting in a chaotic regulatory regime. Cannabis has been illegal at the federal level in the U.S. since the 1970s under the Controlled Substances Act and is classified here as a Schedule I drug, even though many states have legalized it for medical or recreational use. This paradox makes it impossible for cannabis businesses to avail of basic banking, insurance, and commerce across state lines.

In addition, multiple changes in policy of legalization, suspension of licenses, and contentious policies in developing markets of Germany, Thailand, and some regions in Latin America provide additional ambiguity. Approval timelines are protracted, rules change unexpectedly, compliance costs are high, all of which discourage investment and inhibit expansion efforts.

Segmentation Analysis:

By Source

The marijuana segment dominated the legal cannabis market share by source in 2024, with a 76.4% due to its extensive use in medicinal and recreational purposes. The elevated levels of psychoactive compounds, especially THC, available in marijuana mean it is better suited for chronic pain, anxiety, neurological disorders, and adult use in areas where recreational cannabis is permitted. Mature regulatory frameworks in North America and some regions in Europe have additionally enhanced cannabis dispensaries, product options, and patient access programs to a dominant position of market share.

The hemp segment is expected to be the significantly growing over the forecast period in the forecast period, due to the rising demand for cannabidiol (CBD) based wellness and therapeutic products. Due to hemp-derived CBD being non-intoxicating, it is especially interesting for a wider audience in the fields of cosmetics, nutraceuticals, and pharmaceuticals. Decreasing THC levels in various nations have also established greater tolerance by global regulatory authorities, which are facilitating an opening of international hemp-growing markets in developing countries across Asia Pacific, Latin America, and parts of Europe.

By Product Type

Due to holistic use and coping strategies, the flowers/buds segment dominated the legal cannabis market in 2024. This segment serves up cannabis in its most raw, unrefined state, and is a favorite for recreational users and patients who prefer an immediate route through inhalation. Lower production costs and more straightforward access to dried flowers enabled them to be readily available in most legal dispensaries, particularly in mature markets such as the U.S. and Canada.

The fastest growth during the forecast period is expected for the edibles segment, including gummies, baked goods, and beverages, fueled by the shift from smoking to cleaner consumption methods, oil dosing, and long-lasting effects. New Users and wellness-focused consumers favor edibles, their easier lifestyle and range of flavors. Favorable developments, including the advent of new product formulations and the penetration of food & beverage players into the cannabis space, further fuel the growth of this segment globally.

By Derivative

The widespread use in wellness & therapeutics, nutraceuticals, cosmetics, and pharmaceuticals was one of the key factors that significantly increased the total CBD derivative segment and led to dominance over other derivatives in the legal cannabis market in 2024. The absence of psychoactive effects in CBD allows to gain higher acceptance in more populous consumer groups, such as older patients, novices, and those who just want medical benefits but not a high. Additionally, the low regulation in the majority of the nations, more so in Europe and North America, allowed the CBD-infused products to spread across all retail channels, thus further encouraging the segment leading the industry.

The THC segment is estimated to witness the highest growth during the forecast period due to the rise across major markets in the legalization of recreational cannabis, including Germany, Mexico, and several U.S. states. Products with THC produce euphoric properties while having psychoactive effects; this makes them popular in the recreational sector. The ability to develop high-demand offerings derived from THC, combined with constant refinement of formulation technologies, such as nanoemulsion and controlled dosing, and experienced consumers seeking cannabis products with a higher effects profile, will boost their demand globally.

By End-use

The medical use segment held the largest share in 2024 of the legal cannabis market, driven by the acceptance of cannabis as an effective treatment for chronic pain, epilepsy, multiple sclerosis, anxiety, and nausea caused by chemotherapy. Countries, such as Canada, Germany, and multiple states in the U.S. have regulated markets with medical cannabis programs already in place that provide for access via prescription and for physician-driven implementation. The growing ageing population and also the sector clinical research validating the efficiency of cannabis have continued to support market leadership for the medical cannabis segment.

The recreational use segment is projected to grow the fastest during the forecast period, owing to the rapidly rising legalization of cannabis for adult use in North America and a few European and Latin American countries. The normalization of cannabis consumption in lifestyle and wellness contexts and the deployment of the new retail paradigm of dispensaries have broadened the consumer demographic to include those who may not have used cannabis previously. Furthermore, the growing popularity of products, such as edibles, beverages, and vapes is bringing in new young consumers, causing this segment to expand at an unprecedented pace.

Regional Analysis:

Early and broad legalization in major U.S. and Canadian markets drive North America’s dominance in the legal cannabis market trend with a 48.3% market share. While Canada legalized cannabis fully in 2018, the U.S. states have moved forward with progressive cannabis legislation, creating massive cultivation, product innovation, and retail infrastructure. This region is the global leader in the cannabis market and its commercialization, due to favorable regulatory frameworks, increasing medical applications, high consumer awareness, and significant investments from the public and private sectors.

The legal cannabis market in Asia Pacific is growing at the fastest pace, with around 26.34% CAGR over the forecast period, with countries, such as Thailand, South Korea, and Australia working toward the legalization of medical cannabis use. Increasing knowledge regarding therapeutic advantages, continued regulatory changes, and the growth of domestic agricultural production are bolstering the industry. Genuine climatic conditions for the development of cannabis and rising foreign investments for R&D and infrastructure facilities are also spurring cannabis-based products’ adoption and making Asia Pacific the fastest-growing regional market.

The legal cannabis market analysis in Europe is growing due to increased medical cannabis programs, changing regulations, and greater acceptance by patients. With some level of adulthood for medical cannabis systems and rising prescription numbers, Germany, the U.K., and the Netherlands have taken the lead. The region boasts a solid pharmaceutical infrastructure and research programs dedicated to developing therapies with cannabinoids. While the harmonization of regulatory rules is already taking place within the EU, Europe is likely to become one of the best markets for legal cannabis in the forecast years.

The legal cannabis market in Latin America and the Middle East & Africa (MEA) demonstrates moderate growth. In Latin America, nations, such as Colombia and Uruguay have created medical (and some even recreational) cannabis legalities supporting production and exports. But the growth is slower due to regulatory inconsistencies and a lack of aggregated domestic consumption.

Moderate growth in the MEA region is expected owing to regulatory environments becoming gradually stricter in some areas and the cultural sentiment in some other areas. However, their respective mature awareness of the therapeutic attributes of cannabis and early-stage policy processes in South Africa and Israel is setting up the next phase of market growth.

Key Players:

The legal cannabis market companies are Canopy Growth Corporation, Aurora Cannabis Inc., Tilray Brands, Inc., Cronos Group Inc., Curaleaf Holdings, Inc., Trulieve Cannabis Corp., Green Thumb Industries (GTI), Cresco Labs, Aphria Inc., Ayr Wellness Inc., Hexo Corp., Columbia Care Inc., MedMen Enterprises Inc., Organigram Holdings Inc., Sundial Growers Inc., TerrAscend Corp., Vireo Health International, Inc., Harvest Health & Recreation Inc., Jushi Holdings Inc., Village Farms International, Inc., and other players.

Recent Developments:

  • April 2025 – Aurora Cannabis Inc., a top Canadian-based international medical cannabis firm, reported the successful completion of a multi-year $3 million investment to modernize its production plant based in Pemberton, British Columbia. The improvements are intended to streamline production and enhance the company's long-term success in the medical cannabis industry.

  • June 2025 – Tilray Medical, the medical subsidiary of Tilray Brands, Inc., and a worldwide cannabis medical leader, published a new scientific paper. The study compares bioavailability among different cannabinoid formulations, furthering clinical knowledge and enabling informed, individualized treatment choices between physicians and patients.

    Legal Cannabis Market Report Scope:
    Report Attributes Details
    Market Size in 2024 USD 22.16 Billion 
    Market Size by 2032 USD 138.08 Billion 
    CAGR CAGR of 25.75% From 2025 to 2032
    Base Year 2024
    Forecast Period 2025-2032
    Historical Data 2021-2023
    Report Scope & Coverage Market Size, Segments Analysis, Competitive Landscape, Regional Analysis, DROC & SWOT Analysis, Forecast Outlook
    Key Segments • By Source (Marijuana, Hemp)
    • By Product Type (Flowers/Buds, Oils, Tinctures, Edibles [Gummies, Baked Goods, Beverages], Topicals [Creams, Balms, Lotions], Capsules and Tablets, Concentrates [Waxes, Shatter, Rosin], Others [Transdermal Patches, Suppositories])
    • By Derivative (CBD, THC)
    • By End-use (Medical Use, Recreational Use, Industrial Use, Veterinarians [Cannabis Products for Animals])
    Regional Analysis/Coverage North America (US, Canada, Mexico), Europe (Germany, France, UK, Italy, Spain, Poland, Turkey, Rest of Europe), Asia Pacific (China, India, Japan, South Korea, Singapore, Australia, Rest of Asia Pacific), Middle East & Africa (UAE, Saudi Arabia, Qatar, South Africa, Rest of Middle East & Africa), Latin America (Brazil, Argentina, Rest of Latin America)
    Company Profiles The legal cannabis market companies are Canopy Growth Corporation, Aurora Cannabis Inc., Tilray Brands, Inc., Cronos Group Inc., Curaleaf Holdings, Inc., Trulieve Cannabis Corp., Green Thumb Industries (GTI), Cresco Labs, Aphria Inc., Ayr Wellness Inc., Hexo Corp., Columbia Care Inc., MedMen Enterprises Inc., Organigram Holdings Inc., Sundial Growers Inc., TerrAscend Corp., Vireo Health International, Inc., Harvest Health & Recreation Inc., Jushi Holdings Inc., Village Farms International, Inc., and other players.