Why 2024 Will Be a Game-Changer for Cannabis Investment

Global Cannabis Sales Surge to $50 Billion in 2023, with Illicit Market Worth Estimated at $344 Billion

The global cannabis market continues to exceed expectations, reaching an estimated $50 billion in legal sales in 2023. This impressive figure reflects the growing acceptance of cannabis use around the world, despite it still being illegal in most countries. When factoring in the illicit market, the total value of cannabis sales skyrockets to a staggering $344 billion, underscoring the plant’s popularity even in jurisdictions where its use remains restricted. As more countries move towards legalization, new demographics will likely join the market, further driving growth.

Cannabis remains the most-used drug worldwide, and as legislative changes progress, 2024 is set to be a year of potential big wins for the industry from regulatory, economic, and social standpoints.

Big Cannabis Players Are Making Major Regulatory Moves

The cannabis industry has long faced political and regulatory hurdles, which have hindered its growth. However, 2023 saw significant developments, and more regulatory changes are anticipated in 2024.

One of the most notable movements came in August when the U.S. Health and Human Services (HHS) Assistant Secretary for Health, Rachel Levine, recommended rescheduling cannabis from a Schedule I drug (alongside heroin and LSD) to a Schedule III drug. This shift would reduce the stigma surrounding cannabis and open doors to further research and business opportunities.

In Europe, Germany is also making strides. Both sides of the political aisle have been calling for the decriminalization of cannabis. Recently, the German parliament approved a proposal to decriminalize the drug, establish social clubs, and remove cannabis from the list of narcotics. These moves are expected to further the push towards full legalization.

These landmark events are likely to spark a global wave of cannabis legalization, with countries like Thailand, Ukraine, Czechia, Albania, Morocco, Brazil, and Japan all considering or advancing their cannabis programs. As 2024 unfolds, we can expect more nations to jump on the cannabis legalization bandwagon, surprising many by their participation in the global cannabis boom.

Cannabis Business Valuations Are on the Rise

In the business world, cannabis valuations in North America, particularly in the U.S. and Canada, have become a key topic of discussion. U.S. and Canadian cannabis companies have faced challenges, but recent developments suggest that valuations are beginning to rebound.

Canadian cannabis companies have struggled with insolvency and unprofitable margins, but many are now pulling back from unsustainable business models in favor of profitability. The days of the “race to the bottom” may be over as companies shift focus towards healthier margins.

In the U.S., cannabis companies are also facing high taxes at both the federal and state levels, coupled with over-licensing in states like Oregon and California. This has led to a decline in prices and made it difficult to operate in certain regions. However, major players such as CuraLeaf are adapting by concentrating on profitable markets and efficient business models. In addition, the proposed SAFER Banking Act could open up regulated financial access for cannabis companies, helping to reduce bad debt and support growth.

Outside North America, cannabis markets are expanding. The entrance of European and Australian businesses into the cannabis sector is helping to boost valuations in the U.S. and Canada. With mature markets eyeing emerging ones for mergers and acquisitions, 2024 could see significant cross-Atlantic activity as U.S. companies seek growth and Canadian firms look for better margins to sustain their operations.

Cannabis Is Increasingly the People’s Choice

As cannabis becomes more widely accepted, public opinion continues to shift in favor of legalization. With the rise of social clubs in countries like Spain, Malta, and the Netherlands, and the increasing availability of legal cannabis in destinations such as the U.S., Canada, and Germany, the global public is becoming more familiar with the plant’s benefits.

Cannabis is often compared to alcohol for its social and medicinal uses, with proponents arguing that it offers superior health benefits for conditions like pain, stress, and anxiety. Despite its widespread use, cannabis is also notable for its safety profile, with no recorded deaths from consumption.

In a world facing numerous challenges, including conflicts and economic strife, many argue that legalizing cannabis is a simple way for legislators to provide their constituents with a positive change. The overwhelming support for medical cannabis is evident, with 88% of U.S. adults in favor of its legalization, and similar sentiments are echoed across Europe.

Political opposition to cannabis, often driven by Big Pharma’s influence, is weakening as the success of legal markets becomes undeniable. In 2024, it is expected that the push for full cannabis legalization will only intensify, driven by growing consumer demand and political pressures.

Cannabis’ 2024 Upswing Is Near-Guaranteed

After years of regulatory and economic challenges, the cannabis industry seems poised for a breakthrough in 2024. With the Biden administration seeking an easy win, rescheduling cannabis in the U.S. is a likely move. In Germany, decriminalization is gaining momentum, and politicians are pushing for further progress.

Globally, more countries are expected to follow suit as legalization efforts continue to build. As businesses that have weathered the storm of the past few years become stronger and more profitable, their valuations are likely to rise. Consumer demand will continue to be a driving force, especially as more people experience the benefits of cannabis firsthand through legal channels.

The time for change is now, and cannabis supporters are urging regulators to make 2024 the year of action. As public opinion sways in favor of legalization, and politicians find it harder to ignore their constituents’ wishes, the future of cannabis looks brighter than ever.