The North America legal cannabis market was valued at USD 36.70 billion in 2023 and is anticipated to grow at a compound annual growth rate (CAGR) of 11.9% from 2024 to 2030. The market’s robust expansion is primarily fueled by the ongoing legalization of cannabis across multiple U.S. states and Canadian provinces, as well as the increasing awareness of its therapeutic and wellness-related benefits. For example, in May 2023, the Government of Minnesota legalized cannabis for recreational use, making it the 23rd U.S. state to allow adult-use cannabis. Similarly, Kentucky’s General Assembly passed legislation to legalize medical cannabis, set to take effect in January 2025, further expanding the market landscape.

A significant contributor to the growing demand is the increased need for pain management solutions, particularly among individuals suffering from chronic and high-impact pain. The growing burden of chronic pain disorders is driving patients to seek alternative therapies such as cannabis. According to the U.S. Pain Foundation (August 2023), an estimated 51.6 million Americans are affected by chronic pain, of which 17.1 million suffer from high-impact chronic pain that significantly limits life or work activities. Supporting this, a study published in JAMA Network Open in January 2023 found that nearly one-third of chronic pain patients in the U.S. reported using cannabis to manage their symptoms. These trends underscore the expanding role of cannabis in therapeutic care and its growing acceptance among both consumers and healthcare professionals.

The market is further supported by pro-cannabis government initiatives and rising investment from both public and private sectors. A notable example is the Sustainable Canadian Agricultural Partnership (Sustainable CAP) launched by the Government of Alberta in April 2023. Through this initiative, cannabis growers and processors in Canada are eligible to access up to USD 2.6 billion (CAD 3.5 billion) in funding. The program is administered by the Ministry of Agriculture and Irrigation and is aimed at enhancing sustainability, innovation, and competitiveness in the sector.

Another key driver of market growth is the increasing consumer acceptance of cannabis, alongside market expansion efforts by established and emerging cannabis companies. For instance, The Cannabist Company, a prominent New York-based cannabis enterprise, expanded its retail operations by launching adult-use cannabis sales in New Jersey, Maryland, and Virginia in July 2024. The company now maintains a presence in 16 U.S. states, reflecting the growing strategic importance of regional market expansion to meet rising consumer demand.

Furthermore, both medical and non-medical applications of cannabis continue to gain traction, bolstered by ongoing research and innovation in product development. Over the past five years, federal funding for cannabis research and innovation in Canada has ranged widely—from USD 5,368.9, allocated to Ricci Cannabis to develop “wine-style” non-alcoholic cannabis beverages via the National Research Council of Canada’s Industrial Research Assistance Program, to a substantial USD 3.92 million granted to PBG Biopharma through the Regional Economic Growth through Innovation (REGI) program. These investments reflect strong institutional support for innovation and the potential commercialization of new cannabis products.

In addition, cannabis companies are investing heavily in research and development (RD) to integrate artificial intelligence (AI) into their cultivation and retail operations. For example, in April 2023, Barky AI and Highten introduced Canna-GPT, an AI-powered cannabis education platform. This tool allows users to ask cannabis-related questions and receive accurate, real-time answers, helping bridge the knowledge gap and improve accessibility for both consumers and professionals.

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Detailed Segmentation:

Sources Insights

By source, the marijuana segment dominated the market in 2023 and is anticipated to witness the fastest growth with a CAGR of 12.92% over the forecast period. This growth is attributed to the growing adoption of marijuana products along with increasing legalization of medical marijuana.

Derivatives Insights

By derivatives, the CBD segment dominated the market with a revenue share of 64.6% in 2023. Factors such as growing public awareness about CBD's health advantages, positive legislative policies, rising adoption of CBD-based cosmetics, and the increased use of CBD oil in multiple industries and its use in several medicines propel the market growth. 

Cultivation Insights

By cultivation, the indoor cultivation segment held the largest market share of 54.5% in 2023 and is expected to witness fastest growth over the forecast period. The liberalization of laws and regulations associated with cannabis cultivation, particularly for hemp cultivation due to its low THC content, is further increasing its adoption. 

End Use Insights

By end use, the recreational use segment dominated the market with revenue share of 66.3% in 2023 and is anticipated to grow at a fastest CAGR over the forecast period. Factors such as the growing legalization of cannabis for adult use and the increasing adoption of cannabis vape pens are fueling the market's growth. 

Key North America Legal Cannabis Companies:

• Canopy Growth Corporation
• Charlotte's Web, Inc.
• Aurora Cannabis Inc.
• Tilray Brands
• The Cronos Group
• Jazz Pharmaceuticals, Inc.
• Sundial Growers
• Medipharm Labs
• NuLeaf Naturals, LLC
• Irwin Naturals

Recent Developments

• In July 2023, the RIFF cannabis brand from Tilray Brands launched new THC beverages with two fruit flavors: wild raspberry lemonade and blue raspberry ice.
• In March 2023, Irwin Naturals, launched Irwin Naturals Cannabis’ new CBD 25mg Softgels in Canada. The product is available nationwide under the Starseed Medicinal Medical Group platform.

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