![](\"https:\/\/www.insurancejournal.com\/app\/uploads\/2019\/06\/Cannabis-580x390.jpg\")
<\/p>\nA new report shows global legal cannabis spending grew to $36 billion in 2023, and more importantly, that languishing sales in longer-legal states may soon start to swing back up \u2013 two big, encouraging signs for insuring cannabis specialists.<\/p>\n
BDSA, a data provider for the cannabis industry, said this week that sales grew last year, while sales are forecast sales to continue to grow at a compound annual growth rate of 10% from 2023 to 2028, yielding a $58 billion market by 2028.<\/p>\n
The growth of legal cannabis sales is largely being driven by U.S. markets, fueled by the adult-use channel, according to BDSA. The firm\u2019s data shows that U.S. adult-use markets represent roughly 56% of total global cannabis sales.<\/p>\n
Mature adult-use markets like California and Colorado have struggled with cannabis price compression and illicit competition, however emerging adult-use markets including Connecticut, Maryland, Missouri, New Jersey, New York and Illinois, are forecast to see rapid growth to help offset those trends, the report shows.<\/p>\n
Florida and Pennsylvania are both medical markets, but they are forecast to launch adult-use sales in 2025 and see strong growth out to 2028, according to BDSA.<\/p>\n
Underlying good news in the report for cannabis sellers and those who service them is that some of the step-back in the long-legal states may be winding down. California and Colorado are expected to return to periods of growth.<\/p>\n
\u201cWe do expect the markets where there\u2019s been a decline or stagnation to pick up in the next couple of years,\u201d said Brendan Mitchel-Chesebro, a BDSA analyst.<\/p>\n
Cannabis is now legal for adult-use or medical-use in most states, putting 53% of Americans in a legal state<\/a>, which is expected to help drive cannabis sales over the next few years to $54 billion by 2027, according to the MJBiz Factbook<\/a>.<\/p>\n Dragging on growth is increased competition that has pushed the average retail price of cannabis down. BDSA data from late last year showed average retail prices across mature markets \u2013 Arizona, California, Colorado, Nevada and Oregon \u2013 fell 13% between the third quarter of 2021 and the same time in 2022<\/a>, with some markets seeing price compression higher than 20%.<\/p>\n Insuring cannabis specialists say optimism for growth domestically can be boiled down to the \u201cM states,\u201d the newly or newer legal states like Michigan, Massachusetts, Missouri, Minnesota and Maryland.<\/p>\n \u201cWe\u2019re adding underwriters. We have more submissions every month,\u201d said Charles Pyfrom, chief marketing officer and CannGen Insurance Services LLC.<\/p>\n As recreational sales pick up on the East Coast, the firm is seeing more licenses applied for or expansions of existing cannabis operations.<\/p>\n \u201cIt\u2019s a trickle-up effect,\u201d Pyfrom said.<\/p>\n More notably, the firm is poised to take advantage of growth overseas in cannabis.<\/p>\n Germany in February passed cannabis legalization, paving the way for controlled consumption<\/a> of the substance starting April 1. Pyfrom said CannGen is in or poised to be in six countries: Portugal, Spain, The Netherlands, France, Germany and the Greater U.K.<\/p>\n \u201cWe have a global presence, and we are actively underwriting risk in the E.U. right now,\u201d he said.<\/p>\n T.J. Frost, president of Symphony Grow, is one of those brokers who saw cannabis companies downsize or exit California over the last few years.<\/p>\n \u201cI see them coming back in,\u201d he said. \u201cThe market is definitely built for expansion right now.\u201d<\/p>\n Some companies that had overexpanded vertically are now narrowing down what they are good at and focusing their efforts there, he added.<\/p>\n \u201cThey\u2019re figuring out where they can be successful and putting their eggs in those baskets,\u201d Frost said.<\/p>\n The firm\u2019s confidence in the market may be reflected in a recent move to launch a bespoke captive insurance program<\/a> for large and sophisticated cannabis businesses called \u201cSymphony Grow Captive.\u201d<\/p>\n \u201cThe trajectory out to 2028 is going to be quite large,\u201d Frost said.<\/p>\n The global figures are encouraging for market growth, but the U.S. will continue to be the prime power behind cannabis sales over the next few years.<\/p>\n \u201cThe U.S. market really is driving global sales at this point land we do forecast that to continue out to 2028,\u201d Mitchel-Chesebro said.<\/p>\n The report doesn\u2019t detail many product categories, however Mitchel-Chesebro highlighted infused prerolls as a potential product segment of continued growth. Infused prerolls made up 42% of total preroll sales as of January. Two years ago, infused prerolls made up 31% of total sales.<\/p>\n \u201cInfused prerolls is one area where we\u2019ve seen a whole lot of growth,\u201d he said.<\/p>\n Sales in that category are being driven by consumer interest in high THC products, which has also been bolstered by prices coming down for the products.<\/p>\n Another product trend is shake and trim lite, which is ground flower and ground, ready to roll cannabis. From 2021 to 2023, the market share grew by 122%. The category only makes up about 2% of retail sales, but it\u2019s an important and growing category, according to Mitchel-Chesebro.<\/p>\n Topics<\/span> California<\/a> Trends<\/a> Cannabis<\/a> Colorado<\/a> <\/p>\n<\/p><\/div>\n Was this article valuable?<\/p>\n<\/p><\/div>\n