What’s Next for the Booming Cannabis Market?


There’s growing interest – down-right excitement in some cases – surrounding the global cannabis space, and with good reason. A report by Fortune Business Insights projects the global cannabis market earnings to grow from $28.3 billion in 2021 to $197.7 billion in 2028 – a staggering CAGR of 32.04 percent from 2021 to 2028.

Granted, the industry hasn’t progressed as quickly as expected. In fact it’s still in the midst of some serious growing pains, including spotty legalization/decriminalization measures worldwide, the lack of a federal mandate in the U.S. and other countries, and a range of funding issues for entities looking to expand their operations.

Still, there are some equally serious reasons for optimism.

In a recent episode of the ICR podcast, Welcome to the Arena, ICR Co-Founder and CEO Tom Ryan spoke with Miguel Martin, CEO of Canada’s Aurora Cannabis Inc. – one of the world’s largest and fastest growing cannabis companies – to discuss the current state of the global cannabis market, as well as the many economic and social issues driving its future.

Medical Marijuana

When Canada legalized the recreational use of cannabis in 2018 expectations were sky-high that its licensed producers would soon be supplying recreational marijuana to markets around the globe, especially its neighbor, the United States. Not surprisingly investors pounced on what was perceived to be a golden earnings opportunity.

But, as is often the case, things didn’t work out exactly as planned. The recreational market in the U.S., like so many others, hasn’t opened up as quickly as anticipated.

On the brighter side, however, the legalization of medicinal marijuana/cannabis, continues to be the industry’s bright light. That’s due in large part to studies that have demonstrated cannabinoids (compounds found in cannabis) can help in the treatment of AIDS, cancer, asthma, and glaucoma; and can also serve as antidepressants, appetite stimulants, and anticonvulsants.

As a result, more than 30 states have legalized medical use of cannabis in the U.S. and more than 20 countries around the world now allow medical use as well.

All of which bodes well for Aurora, which was originally founded to develop and supply medicinal marijuana. The company, Martin says, is currently well-positioned to tap fast-growing medicinal markets in Europe – including Germany, the U.K, Poland, Czech Republic, France, Switzerland, Italy, and Portugal – as well as the United States, Israel, and Australia.

“A lot of people are focused on the recreational market, but in the U.S., President Biden, when pressed on the issue, has said consistently that it’s medical first, and then decriminalization,” Martin says.

Meeting the regulatory requirements to supply medical cannabis to those markets, he adds, is no easy task. But clearing those hurdles now will ultimately help Aurora gain approvals to supply recreational cannabis products if/when those same markets open up further on down the road.

“You can definitely see the advantages for those companies that (currently) bring excellence in medical,” Martin explains. “When those geographies turn into (recreational markets), you can sell the same products. You can use the same production facilities. You’ll be working with the same regulators. All of these things will add up to being successful long-term.” 

Cannabis Research & Development

While medical and recreational markets continue to generate headlines, there are somewhat less sexy but potentially much more significant developments underway involving genetics and biosynthesis – essentially the science around improving a cannabis plant’s health, makeup and yield. 

Genetics involves selective breeding to develop and market plant varieties or products comprised of differing compounds and/or potency levels. Aurora already operates what Martin describes as one of the largest cannabinoid genetics labs in the world and is now marketing a number of new products – one of which is being licensed to a recreational producer in Canada.

Biosynthesis – which has long been used to produce a range of pharmaceutical therapies like insulin and human growth hormone – offers a way for Aurora to develop lower cost, higher yielding plants at much greater scale. The combination of genetics and biosynthesis will help the company develop/produce better products, in greater quantities, and at a lower cost. It will also allow the company to market its intellectual property (IP) globally, further enhancing its bottom line.

That’s key, Martin says, because as the industry continues to grow – especially the recreational markets – it will most certainly attract new competitors with ultra-deep pockets, such as international Pharma, tobacco, and alcoholic beverage enterprises. 

“Anybody who says they know where the cannabinoids market is going to be in the next two to three years is wrong. It’s just too dynamic and too uncertain to know exactly what it’s going to look like,” Martin says. “What we do know – and history has proven it – is that there is a massive tailwind and massive upside for cannabinoids globally. So, you want to have a diversified business that take takes advantage of that.”

Indeed, it’s a fascinating discussion. Other topics include projected global recreation market growth, Covid’s impact on markets, the need for safe harbor lending reforms in the U.S., domestic and international cannabis production, and establishing/developing relationships with regulators in a range of markets.

Get the whole conversation. Listen to the podcast today.