Cannabis extracts are concentrated formulations obtained from cannabis plants through various extraction processes such as CO2 extraction, ethanol extraction, and hydrocarbons extraction. Edible cannabis extracts are used in various food products such as drinks, candies, baked goods, and others. While topical cannabis extracts are used in cosmetic products for their purported therapeutic benefits. The global cannabis extract market is estimated to be valued at US$12,331.66 Bn in 2023 and is expected to exhibit a CAGR of 23% over the forecast period 2024 to 2031, as highlighted in a new report published by Coherent Market Insights.
Market Dynamics:
One of the key drivers for the growth of the global cannabis extract market is the increasing legalization of cannabis and its derivatives across various countries. In recent years, many countries have legalized the use of cannabis for medical as well as recreational purposes, which has significantly boosted the demand for cannabis extracts. According to the UNODC, around 47 countries have legally recognized the use of cannabis in some form. The increasing commercialization of cannabis-based products is another major factor fueling the market growth. Many companies are launching innovative cannabis-based edibles, beverages, topicals, and other products to capitalize on the opportunities in the legal cannabis industry. However, the complex regulatory framework around the use of cannabis continues to hinders the overall growth of the market.
SWOT Analysis
Strength: The cannabis extract market has been witnessing strong growth owing to the legalization of cannabis for medical and adult-use in various countries. Increasing availability of different cannabis extract products such as vape pens, edibles, tinctures is expanding the market potential. Additionally, widening scope of applications for cannabis extract in conditions like chronic pain, arthritis, depression is fueling the market growth.
Weakness: However, the regulatory barrier and legalization status of cannabis in many countries still remains a major challenge for the industry. Strict norms and guidelines around the production, distribution and sales of cannabis products limits the scope of growth. Lack of standards for dose and product quality can also negatively impact consumer safety.
Opportunity: Emerging trends like cannabis legalization in more countries and regions like Europe and Asia present significant growth avenue. Continuing research focused on the medical benefits is helping expand approved therapeutic applications and strengthen the market position. Growing consumer awareness about cannabis wellness products also provides new opportunities.
Threats: Stringent regulations around cannabis advertising and marketing remains a persistent threat. Stigmas associated with cannabis use can deter potential customers. Stringent import and export regulations between countries where cannabis is legal and others where it is not approved also poses challenges. Rising competition from alternative treatment therapies is another threat.
Key Takeaways
The Global Cannabis Extract Market Share is expected to witness high growth over the forecast period.
Regional analysis shows that North America currently dominates the global market with the U.S. capturing the largest share. Favorable regulatory framework, significant investments in cannabis cultivation infra and widening product portfolio are fueling the regional market growth. Europe is identified as the fastest growing region owing to increasing medical cannabis legalization and growing consumer acceptance in countries like Germany. Asia Pacific region is also projected to offer promising growth avenues led by emerging economies like India easing cannabis regulations and China ramping up industrial hemp production.
Key players operating in the Cannabis Extract Market are Zeta Global Corp, Oracle Corporation, mParticle Inc., Salesforce.com Inc., BlueConic, Adobe Inc., Tealium, SAP SE, Acquia Inc., and Segment.Io Inc. (Twilio). These companies are mainly adopting product innovation, expansion strategies to enhance their market presence. For instance, mParticle recently acquired certain assets of Crumbs to strengthen its mobile data capabilities. Tealium partnered with Lotame to integrate third-party data with its unified customer data platform.
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