Cannabis Extract Market Projected To Exhibit Robust CAGR of 16.6% For The Forecast Period From 2020 To 2027: Grand View Research Inc.

 

The global cannabis extract market size is expected to be valued at USD 28.5 billion by 2027, according to a new report published by Grand View Research, Inc. It is projected to expand at a CAGR of 16.6% over the forecast period. Growing legalization of cannabis in various countries, preference for cannabis oil and tinctures, and adoption of medical marijuana for treating chronic diseases like arthritis, anxiety, and Alzheimer’s are the major factors propelling the growth.

Multiple therapeutic regimens are being followed across the globe in attempts to come up with a reliable treatment for Covid-19. One line of treatment includes the use of hydroxychloroquine, while a second treatment line focuses to use antiviral drugs used in the disease management of HIV. Both these approaches have surged demand from advanced antivirals and antimalarial drugs. This impacts the drug manufacturers as an off label indication for these drug classes has to be worked upon. At the moment, the WHO has not prescribed any of these approaches, neither they have commented if one is better than the other. The report will account for Covid19 as a key market contributor.

Cannabis extracts have gained wide recognition in recent years and are expected to provide impetus to cannabis market growth. Based on product type, cannabis extracts are classified into oils and tinctures. The oils segment is expected to dominate the market in 2020 with a revenue of USD 4.8 billion and is anticipated to witness the fastest CAGR of 17.5%, over the forecast period.

Based on extract type, the market is segmented into full spectrum cannabis extracts and cannabis isolates. The full spectrum cannabis extracts dominated the market in 2020, with a revenue of USD 4.3 billion, owing to the added advantage of the entourage effect. Various manufacturers prefer full spectrum cannabis products owing to their advantages over the isolates. Thus, the segment is expected to remain dominant over the forecast period.

Increasing the adoption of marijuana for medical and recreational purposes has been booming the overall market growth. Legalization of marijuana in some countries has resulted in rising product purchases 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.

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https://www.grandviewresearch.com/industry-analysis/cannabis-extract-market/request/rs1

Further key findings from the report suggest:

  • In 2020, oils held the largest revenue share of 66.5% owing to ease of availability and low price of the product
  • The full spectrum segment was valued at USD 4.3 billion in 2020, owing to its entourage effect-a synergistic relationship between cannabinoids and terpenes that exhibits an increase in the healing properties of each cannabinoid
  • Marijuana isolates is anticipated to emerge as the second largest type segment over the forecast period, owing to several advantages that have increased its adoption. For instance, the purest form of isolates, such as CBD oil, have no psychoactive effects as they have no THC content
  • In 2020, North America accounted for the largest share in the global cannabis concentrates market. This can be attributed to high utilization owing to government approvals
  • Key players operating in the cannabis extract market include Canopy Growth Corporation; Aphria Inc.; Aurora Cannabis; Maricann Inc.; Tilray; Organigram Holdings Inc.; Tikun Olam, Ltd.; and The Cronos Group

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 vapor 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 extract during the forecast period. 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 have prescribed cannabis oils instead of buds.

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 over the forecast period. The tinctures segment is expected to register a CAGR of 14.5% over the forecast period.

Aphria Inc.; Canopy Growth Corporation; Aurora Cannabis; Maricann Inc.; Organigram Holdings Inc.; The Cronos Group; and TilrayTikun 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.

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.

Grand View Research has segmented the global cannabis extract market on the basis of product, extract type:

Cannabis Extract Product Type Outlook (Revenue, USD Million, 2016 - 2027)

  • Oils
  • Tinctures

Cannabis Extract Type Outlook (Revenue, USD Million, 2016 - 2027)

  • Full spectrum
  • Isolates

 

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