Marijuana: Emerging Markets to Watch in 2023

As attitudes toward cannabis continue to evolve, driven by medical and health considerations, disillusionment with legacy substances, and a growing social acceptance of cannabis use, countries worldwide are on the verge of profound legislative changes. Liberalizing democracies and controlled cannabis applications in alignment with broader societal objectives are setting the stage for significant economic considerations. At the forefront of this evolution is the immense potential offered by the formal, recreational sale of adult-use cannabis products. In this article, we delve into eight of the most promising emerging cannabis markets for 2023.

Germany, Netherlands, and Switzerland: Setting the European Standard

Germany, with cannabis sales reaching a substantial USD 920 million in 2022, has claimed its spot as the world's fourth-largest cannabis market. The nation is currently in the process of legalizing adult-use cannabis products, a journey marked by caution and due diligence. Germany has sought final ratification from the European Union and approval from its neighboring countries. While full legalization is not expected before 2024, once established, it will set a benchmark for other nations to follow.

The Netherlands and Switzerland are also poised to take significant steps toward recreational sales of adult-use cannabis products in 2023. Should Germany's model prove successful, it is likely to bolster and expedite similar trial initiatives in these countries.

Israel: A Progressive Player to Watch

Israel presents an intriguing cannabis market characterized by a progressive stance on usage and groundbreaking medical and scientific research. The country exhibits a high prevalence of cannabis use, and there is broad political support for the legalization of adult-use products, potentially as early as 2024. Although current sales are modest, the conducive growth environment is expected to propel sales to as much as USD 3.4 billion by 2027, positioning Israel as the world's third-highest value cannabis market, surpassing Germany.

Cannabis and Tourism in Thailand

In 2022, Thailand became the first Asian nation to effectively decriminalize cannabis and permit home cultivation of cannabis plants. While this move remains contentious, the significance of tourism to Thailand's economy is a driving force behind the push for new regulations and formal control mechanisms to prevent misuse. The country is edging closer to the legalization of commercial, adult-use cannabis products. However, the situation carries an element of ambiguity, particularly concerning the differentiation between medical and recreational use for foreign visitors. Thailand presents a unique and unpredictable market, but sales potential is estimated to reach USD 2.3 billion by 2027.

Chile, Mexico, and Colombia: Slow Progress Toward Legalization

In Latin America, Chile, Mexico, and Colombia are the most likely candidates to legalize cannabis sales. While personal use of cannabis is effectively decriminalized, and home cultivation is sanctioned in these countries, full legalization is a complex and often protracted process.

Chile witnessed the rejection of legislation aiming to fully legalize adult-use consumption in 2022, delaying potential legalization until at least 2026. Colombia has granted preliminary approval to similar legislation, but it awaits further review in 2023 before becoming law. Mexico is currently reviewing legalization, which appears increasingly likely, but the legislative timeline suggests that recreational sales are unlikely to commence before 2027.

The global cannabis landscape is rapidly evolving, and these emerging markets offer significant opportunities and challenges as they navigate the complex path toward legalization and commercialization.