Cannabis or marijuana, the psychoactive drug from the cannabis plant is growing in popularity around the globe, both for recreational and medicinal uses. While there are many countries that have legalized cannabis in some capacity for medical purposes, only a handful have done so for recreational use. Even though cannabis is not federally legal in the United States, the combined legal states represent the largest market in the world. After the U.S., Canada, which legalized cannabis nation-wide in 2018 represents the next largest market. In 2021, a new coalition government was formed in Germany that indicated that the legalization of cannabis was on their agenda. Germany would be the largest
and would act as a test case for other countries on the continent considering the merits of legalization.
New and existing markets
The number of countries that allow cannabis consumption is growing but that doesn't necessarily translate into a larger
market for cannabis. For instance, Mexico and Malta legalized personal consumption and cultivation in 2021, but the laws in these countries don't allow for recreational sales. Germany is expected to legalize at some point in the coming years and include a provision for sales. The United States added new state markets in 2021, with New York, in particular, expected to be second only to California in terms of market size.
California is the single largest cannabis market in the world, larger even than the entire country of
Canada. The year also saw Virginia as the first Southern U.S. state to legalize recreational use and sales.
Funding the industry
Across the world, cannabis businesses have to deal with legal hurdles when it comes to the financial side of getting their business up and running. A myriad of legal red-tape and stigma makes starting such a business difficult even if technically legal. Because cannabis is still considered a Schedule 1 drug by the federal government in the United States, banks are loath to lend to businesses because of the burden of compliance. Even in Canada where cannabis enjoys nationwide legality, businesses are finding it hard to overcome the stigma that banks attach to the industry. Among known public
cannabis company capital raising deals, businesses in the U.S. were able to raise 2.4 billion U.S. dollars in 2020 and Canadians 883 million. The United Kingdom has become a cannabis deal hub, accounting for over half of all
investment activity in Europe.
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