CANNABIS EXTRACT MARKET ANALYSIS

Cannabis Extract Market Size and Trends

Global cannabis extract market is estimated to be valued at USD 12.38 Bn in 2024 and is expected to reach USD 38.13 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 17.4% from 2024 to 2031.

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The cannabis extract market is expected to grow at a steady pace during the forecast period. Factors such as the growing medical application of cannabis extracts and an increase in expenditure on legal cannabis are expected to drive the market growth. Various countries and states have legalized the medical use of cannabis which has increased the demand for cannabis extracts as they provide precisely formulated cannabis doses to patients. The gradual reduction in the social stigma associated with cannabis usage is also helping the market to grow. However, challenges such as difficulty in international trade of cannabis extracts owing to legal restrictions in many countries and complexity of production processes may hamper the market growth during the forecast period.

Increasing Product Launches by Key Market Players

Increasing product launches is expected to drive the growth of the global cannabis extract market over the forecast period. For instance, on April 5, 2022, Tilray, a pharmaceutical company, launched Solei Bites, the Solei brand’s first foray into edibles and the ready-to-eat THC edible available at the Société Québécoise du cannabis, Quebec's sole legal retailer for cannabis products.

Market Concentration and Competitive Landscape

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The medical use of cannabis and its extracts are gaining more acceptance which is a key factor driving the growth of the cannabis extract market globally. Due to its analgesic, anti-inflammatory, and other therapeutic properties, cannabis is showing a great potential in treating many medical conditions such as chronic pain, arthritis, cancer, epilepsy, Alzheimer's, Parkinson's etc. Many research studies carried out in recent years have demonstrated its effectiveness in alleviating symptoms and improving quality of life of patients suffering from these ailments.

Key Takeaways from Analyst

The cannabis extract market shows strong potential for growth in the coming years. As more states legalize cannabis for medical and recreational use, the demand for cannabis extracts is set to rise substantially. Extracts offer precise dosing and convenient delivery methods that can help expand the cannabis consumer base.

One of the key drivers of the market is the increasing acceptance of cannabis for medical purposes. Cannabis extracts allow for efficient and targeted delivery of specific cannabinoids that provide relief for various medical conditions. This is prompting more patients and doctors to adopt cannabis therapy.

On the regulatory front, inconsistencies across state and national laws pose a challenge for large multi-state operators. However, favorable reforms are likely to address these issues and create a safer and more transparent supply chain over time. This would help mainstream cannabis extracts and products.

Market Challenges: Stringent Government Regulations

Stringent government regulations have created significant barriers that are restraining the growth of the cannabis extract market. While there is increasing public acceptance and understanding of the medicinal properties of cannabis, many national and regional governments have been slow to reform policies around this industry. Dated regulations that lump cannabis in with illicit narcotics continue to govern in numerous jurisdictions. This creates extensive legal hurdles and compliance overhead for businesses seeking to research, develop, and commercialize safe cannabis extract products that could help patients.

Market Opportunities: Emergence of Cannabis-based Pharmaceuticals

The emergence of cannabis-based pharmaceuticals provides a great opportunity for the cannabis extract market to grow in the coming years. As researchers discover more potential medical uses of extracts from the cannabis plant, pharmaceutical companies have started developing FDA-approved drugs that harness the powerful compounds in cannabis, such as CBD and THC. As the medical uses of cannabis become more validated, pharmaceutical companies are likely to develop a wider range of cannabis-based prescription drugs in the future. This represents a multi-billion dollar opportunity for the cannabis extract industry to scale up production and provide purified or standardized cannabis extracts to big pharmaceutical firms. According to the World Health Organization, between 20% to 30% of the world's population suffer from chronic pain and this number is rising due to aging populations. As alternatives to dangerous opioids are sought for pain management, demand for cannabis extracts with pain-relieving properties like CBD is expected to grow significantly in the coming years.

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Product Type segment is sub-segmented into tetrahydrocannabinol (THC), cannabidiol (CBD), cannabigerol (CBG), and cannabinol. The tetrahydrocannabinol (THC) sub-segment is estimated to hold 40.7% of the market share in 2024, owing to its established medical benefits. THC is the primary psychoactive component in cannabis and has been shown to effectively relieve pain and muscle spasms associated with conditions like multiple sclerosis. Its analgesic properties make it particularly effective for pain management applications. Additionally, growing acceptance of medical marijuana programs has expanded patient access to THC-based products in recent years. THC is also well-suited for recreational consumers seeking its euphoric effects. This dual medical and recreational utility has helped establish THC as the predominant compound in the cannabis extract market.

Insights, By Application: Widespread prevalence increases muscle disorder segment share

Application segment is sub-segmented into muscle disorder, neurological disorder (parkinson disease), pain management, and recreation use. The muscle disorder sub-segment is estimated to hold 31.7% of the market share in 2024, due to the high prevalence of conditions like multiple sclerosis. Muscle disorders affect millions worldwide and cause chronic pain as well as mobility issues. Cannabis extracts containing THC and CBD have demonstrated effectiveness in mitigating muscle spasms and discomfort associated with these conditions. This has increased patient demand and physician recommendations for such treatments. Ease of consumption via extracts also enhances patient compliance compared to other delivery forms. The large addressable patient pool and proven benefits have thus made the muscle disorder segment highly prominent in the indication-wise classification.

Insights, By Distribution Channel: Hospital access drives pharmacy segment dominance

Distribution Channel segment is sub-segmented into hospital pharmacies, retail pharmacies, and online pharmacies. The dental clinics sub-segment is estimated to hold 51.2% of the market share in 2024, owing to their direct access to large patient bases. As healthcare providers, hospitals are an important initial point of contact for patients undergoing treatment for severe conditions addressed by cannabis extracts. This high volume of patients exposed to hospital pharmacies gives them an unprecedented opportunity to promote and dispense such medicinal products. It also allows them to maintain close relationships with prescribing doctors. Their integration within the healthcare system and established supply chains provides a competitive edge over other channels in serving the cannabis extract market.

Regional Insights

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North America remains the dominant region in the global cannabis extract market and is estimated to hold 34.7% of the market share in 2024. The U.S. is leading the way with strong industry presence across various states that have legalized medical and recreational use. With legislation and regulations in place, the market has flourished with new product launches, licensing approvals, facility expansions and partnerships. Leading Canadian companies have also established large production capacities to cater to both domestic and international demand. The regional market benefits from developed infrastructure for cultivation, processing and distribution. Ease of access and established distribution channels have ensured the availability of a wide range of products. However, pricing pressures remain due to overcapacity in some markets. While imports are currently negligible, exports are steadily rising with pharma companies eyeing new medical applications.

Europe has emerged as the fastest growing regional market for cannabis extracts globally. Germany represents a major portion of the European market supported by early legalization of medical cannabis in 2017. Since then, the country has seen a flurry of activities including licensing new cultivators, product launches and retail expansion plans. Neighboring countries like Italy, Netherlands and Poland are also witnessing increasing adoption. The growth is driven by rising patient population, evolving regulatory environment, growing awareness and expanding medical applications. While current import levels are substantive to bridge the gap between demand and domestic supply, local production capacities are being built up aggressively. This is anticipated to make the region self-sufficient in the coming years. However, the fragmented regulations across countries pose both challenges and opportunities for the market.

Market Report Scope

Cannabis Extract Industry News

• On March 14, 2024, Tilray Brands Inc., a global leader in the cannabis industry, announced that it had launched Tilray Oral Solution THC 5 CBD 20 in Portugal
• In December 2023, Rare Cannabinoid Company, a health and wellness company, announced that it had launched THC + THCV Uplift Gummies - Unique Edibles With Dreamy Delta-9-THC, Energizing THCV To Combat The Munchies, and CBD Oil
• In April, 2022, Manitoba Harvest, a wholly-owned subsidiary of Tilray, launched Hemp+ Matcha and Hemp+ Supergreens powders at 300 plus Whole Foods Market locations nationwide in the U.S.
• In February 2022, Canopy Growth Corp, a cannabis company, announced the extension of the Ace Valley brand portfolio, with the launch of two new beverages Daylight and Moonwave, which are occasion-based ready-to-drink THC and CBD-infused drinks
• In September 2021, Medical Marijuana, Inc., U.S. based cannabis company, launched the world's first-ever cannabis-derived nutraceutical products, brands and supply chain, announced that the Company’s subsidiary Kannaway had launched its operations in Hong Kong.

*Definition: Cannabis sativa L. is a plant contain naturally occurring compounds which are called “cannabinoids”. There are two well know cannabinoids: Cannabidiol (CBD) and Tetrahydrocannabinol (THC), these compounds are directly extracted from the plant and which are used to manufacture the extracts. Till now U.S Food and Drug Administration has approved Epidiolex, which contains a purified form of the drug substance cannabidiol (CBD) for the treatment of seizures associated with Lennox Gastaut Syndrome or Drvate Syndrome in patient 2 years of age and older. FDA has also approved Marinol and Syndros for nausea associated with cancer chemotherapy and for the treatment of anorexia associated with weight loss in AIDS patients.

Market Segmentation

• Active Ingredient Insights (Revenue, USD Bn, 2019 - 2031)
  • Tetrahydrocannabinol (THC)
  • Cannabidiol (CBD)
  • Cannabigerol (CBG)
  • Cannabinol
•  Product Type Insights (Revenue, USD Bn, 2019 - 2031)
  • Oil
  • Shatter
  • Others (Gummies, Cream, etc.)
•  Extract Type Insights (Revenue, USD Bn, 2019 - 2031)
  • Full spectrum
  • Broad Spectrum
  • Isolates
•  Indication Insights (Revenue, USD Bn, 2019 - 2031)
  • Muscle Disorder
  • Neurological Disorder (Parkinson Disease)
  • Pain Management
  • Recreation use
•  Distribution Channel Insights (Revenue, USD Bn, 2019 - 2031)
  • Hospital Pharmacies
  • Retail Pharmacies
  • Online Pharmacies
• Regional Insights (Revenue, USD Bn, 2019 - 2031)
  • North America
    • U.S.
    • Canada
  • Latin America
    • Brazil
    • Argentina
    • Mexico
    • Rest of Latin America
  • Europe
    • Germany
    • U.K.
    • Spain
    • France
    • Italy
    • Russia
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • Australia
    • South Korea
    • ASEAN
    • Rest of Asia Pacific
  • Middle East
    • GCC Countries
    • Israel
    • Rest of Middle East
  • Africa
    • South Africa
    • North Africa
    • Central Africa
• Key Players Insights
  • Canopy Growth Corporation
  • Aurora Cannabis Inc
  • Tikun Olam
  • Cannabis Science Inc.
  • Aphria Inc.
  • Maricann Group Inc.
  • Tilray Inc.
  • VIVO Cannabis Inc.
  • Medical Marijuana, Inc.
  • STENOCARE
  • Cronos Group Inc.
  • Terra Tech Corp.
  • MedMen
  • Teva Pharmaceutical Industries Ltd
  • Organigram Holdings Inc.
  • Tilray Brands Inc.