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Since the recent birth of the recreational cannabis industry in Canada and the U.S., many have believed that the medicinal market may eventually take a downturn. While this may be true, it seems as though the medicinal market is finding its niche audience, and they have no plans for slowing down any time soon. There are several reasons that the medicinal industry still has a long way to go and the road only looks to keep going up.
One of the reasons that the medicinal industry has been able to stay around at least from a financial perspective is the fact that recreationally based cannabis stocks are still highly volatile and very risky. These companies have a large amount of supply issues, packaging shortages and regulatory measures that are very difficult to navigate.
Analysts have stated that in Canada alone, sales of adult use or recreational cannabis will reach as much as $6 billion by the year 2022. Despite this, the country has only posted around $500 million in sales during the first year thus far.
Medical marijuana for starters already has quite an established market. With so many sales of medicinal cannabis occurring in the past several years in both Canada and the U.S., it seems as though those who purchased it are inclined to continue doing so.
These patients have no reason to slow down on their use of medicinal marijuana and no incentives to move into the recreational market. Additionally, it seems as though often times, medicinal cannabis can actually be cheaper than its adult use cousin. Because of this, it doesn’t look like the medicinal market will be slowing down any time in the near future.
One of the statistics to back this shows that 70% of medicinal users have stated that they consume cannabis every day. Compare this to the 20% of recreational users who say the same thing. This means that investors and those who watch the market can have an easier time predicting that medicinal patients and the medicinal cannabis market could be more steady than recreational.
A key aspect that many often forget is that outside of North America, the majority of legal cannabis is medicinal. Currently, there are more than 40 countries that have greenlit the use of medicinal marijuana, which means that the potential for market share is that much larger. Of course, we have to consider that the next step in the medicinal market and legislation would be to move into the recreational area, but for now that is not the case.
These nations have been working to build their industries, and have no seen anywhere close to the amount of demand that they are projected to see in the coming future. It seems as though the domino effect coming from the U.S. and Canada should help to help move these other markets up as we continue to traverse the complicated world of legal marijuana around the world. For now, only time will tell how these two aspects of the same industry can continue to compete with one another.
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