Executive Summary

The fast-growing cannabis industry continues to offer business opportunities, but the first signs of maturity and consolidation are appearing. In this report, we provide an overview of the regulated cannabis market in the US and Canada. Key findings include:

• Legal recreational cannabis sales in the US are expected to increase 80% to $4.2–$5.1 billion in 2018, according to Marijuana Business Daily, but the first signs of maturity are starting to materialize in pioneer states such as Colorado.
• The recent legalization of cannabis for recreational use in California should be the main driver for the industry in the US. The California market for recreational cannabis is forecast to grow by 79% in 2018 to $1.4 billion, according to New Frontier Data.
• The market in Canada, which is opening up to legal recreational use, is expected to reach $1.7 billion in 2019. The regulatory environment in Canada enable cannabis companies to grow more than their US counterparts. Firms including Canopy Growth and Aurora Cannabis are multi-billion-dollar public companies pursuing consolidation strategies.
• We are seeing increased consolidation in both the US and Canada cannabis industry and this is likely to threaten the survival of smaller companies trying to make their mark.