Cannabis Extract Market By Type(Conventional, Organic), By Extraction(Solvent, Solvent-Less), By Application(Pharmaceutical, Textile, Cosmetic, Paper, Others), By Distribution(Online Pharmacies, Hospital Pharmacies, Retail Pharmacies) By Region And Companies - Industry Segment Outlook, Market Assessment, Competition Scenario, Trends, And Forecast 2023-2032

Cannabis Extract Market Size, Share, Trends Analysis

The Cannabis Extract Market was valued at USD 10.19 billion in 2022. It is expected to reach USD 67.5 billion by 2032, with a CAGR of 21.4% during the forecast period from 2023 to 2032.

The surge in demand in the pharmaceutical industry and the legalization of cannabis are some of the main driving factors for the cannabis extraction market growth. Medical cannabis, which is also known as medical marijuana (MMJ), is cannabis and cannabinoids that are advised by medical experts for patients to relieve pain from any kind of chronic disease.

Due to government restrictions and manufacturing, cannabis as medicine has not been rigorously tested, limiting clinical research efforts to discovering its safety and usage for treating diseases.

Cannabis offers many therapeutic effects, from relieving chemotherapy-induced nausea and vomiting, enhancing immunity in those living with HIV/AIDS, and relieving chronic pain or muscle contractions to decreasing chronic discomfort and muscle spasms.

According to the European Commission, 2.77 million cancer cases will be anticipated in 2022 and death cases related to cancer will increase by 2.4% year on year compared with 2020. 31% of men and 25% of women will be diagnosed before reaching 75 years of age; whilst 14% of male cancer victims and 9% of female ones will ultimately succumb.

WHO estimates that by 2023 approximately 50 million individuals will have epilepsy, one of the most prevalent neurological disorders worldwide. With proper treatment over 70% could live seizure-free lives - marijuana helps slow cancer cell growth while oral cannabis minimizes side effects associated with chemotherapy treatment.

Epidiolex is a medical cannabidiol (CBD) product designed to treat rare, severe, and specific forms of epilepsy. Many Americans are supporting the legalization of cannabis. According to the Pew Research Centre, 88% of American individuals support the legalization and 59% of individuals suggest that the legalization of cannabis should be only for medical and recreational usage. Of those, 30% of individuals advise that legalization should be strictly used for medical purposes.

The demand for cannabis is not limited to medicinal use but it is also widely used in food and beverages as well as in the cosmetic industry. Cannabis is used while making chocolates to drink and other savory dishes, due to this chefs can boost the flavors, create exceptional aromas, and even customize the dining experience according to specific choices. The demand for cannabis extract is expected to increase rapidly because of the numerous benefits across different sectors, which will assist in expanding the market in the future.

Driving Factors

Health Benefits Awareness Enhances Cannabis Extracts Demand

As awareness of the health benefits associated with cannabis extracts increases, so too does its market growth. With scientific research revealing therapeutic properties of cannabis including pain relief, anxiety reduction, and potential anti-inflammatory properties being discovered more publicly; public perception is changing and more people are using cannabis extracts for medical and wellness reasons.

This shift leads to wider acceptance and utilization of cannabis extracts for these purposes. The trend towards natural and alternative therapies is likely to continue, suggesting sustained growth for the cannabis extract market as more consumers seek these health benefits.

R&D Investment Spurs Market Innovation

Heightened investment in research and development within the cannabis sector is critically shaping the market for cannabis extracts. R&D efforts are focused on understanding the full potential of cannabis, improving extraction methods, and developing new, more effective products.

This investment is leading to greater product diversification and quality, enhancing market appeal. The ongoing commitment to R&D indicates a dynamic market evolving through continuous innovation, with future growth driven by scientific advancements and product development in cannabis extracts.

Cannabis Edibles Popularity Opens New Market Avenues

The rising popularity of cannabis edibles is a key driver for the cannabis extract market. Edibles offer an alternative consumption method to smoking, appealing to a broader range of consumers, including those seeking discreet or health-conscious options.

The versatility of cannabis extracts in edibles, ranging from baked goods to beverages, is enabling creative product development and market expansion. This growing segment indicates a market adapting to consumer preferences, with edibles likely to continue driving cannabis extract demand due to their convenience, variety, and accessibility.

Restraining Factors

Competition from Alternative Products Challenges Cannabis Extract Market Growth

Consumers seeking health and wellness benefits or recreational experiences have a wide array of options beyond cannabis extracts, including traditional pharmaceuticals, nutraceuticals, and other herbal remedies. Many of these alternatives are more established and widely accepted, benefiting from long-standing market presence and consumer trust. This competition can make it difficult for cannabis extract products to gain a foothold, especially in segments where consumers are cautious about trying new products or where alternative products have proven efficacy or lower costs.

Lack of Access to Financial Services Limits Cannabis Extract Market Expansion

The cannabis extract market is also limited by a lack of access to financial services. Despite increasing legalization and acceptance, the cannabis industry often faces challenges in accessing basic financial services like banking, loans, and payment processing due to the legal and regulatory complexities surrounding cannabis.

This lack of financial support can hinder the growth of businesses in the cannabis extract market, as they struggle to secure capital for expansion, operational costs, and innovation. The difficulty in obtaining financial services not only restricts the scalability of cannabis extract businesses but also poses challenges in managing day-to-day operations and competing with other industries that have full access to financial resources.

Cannabis Extract Market Segmentation Analysis

By Type

Conventional cannabis extracts are the predominant segment in the market. This segment's dominance is attributed to the established cultivation and extraction methods that have been refined over the years.

Conventional extracts are often more readily available and are usually less expensive than their organic counterparts, making them more accessible to a broader consumer base. This segment's rapid expansion can be attributed to the rising legalization and acceptance of cannabis across multiple regions for medical and recreational use. However, the conventional segment faces challenges from the rising consumer preference for organic and sustainably produced products.

The organic segment, although smaller in the cannabis extract market, is experiencing rapid growth, driven by increasing consumer demand for natural and chemical-free products. This segment caters to a niche market focused on quality, sustainability, and organic cultivation practices. As awareness about the health and environmental impacts of synthetic chemicals grows, more consumers are turning towards organic cannabis extracts, further propelling the growth of this segment.

By Extraction Method

Solvent-based extraction is the most prevalent method in the cannabis extract market. This technique, which typically uses substances like CO2, ethanol, or hydrocarbons, is favored for its efficiency in extracting a high concentration of cannabinoids and terpenes. The growth of this segment is underpinned by technological advancements that have improved the safety and efficiency of solvent-based extraction methods. However, concerns regarding solvent residue and the environmental impact of solvent use are notable challenges.

Solvent-less extraction methods, such as mechanical separation or water-based extraction, are gaining popularity in the cannabis extract market due to their ability to produce purer products without chemical residues. These methods are particularly appealing to health-conscious consumers and those with sensitivities to solvents, thereby opening up new market opportunities for solvent-less cannabis products.

By Application

Pharmaceutical applications of cannabis extracts have long been the focal point for cannabis extractions, reflecting a growing recognition of cannabis' therapeutic value and an expanding selection of medicinal products containing cannabidiol (CBD) compounds. Research and clinical trials exploring new uses for cannabis therapy play an integral part in this sector's expansion; regulatory approvals and guidelines about medical cannabis use also ensure its continual growth.

Cannabis extracts have many applications in textile, cosmetic, and paper industries that utilize its unique properties. Cosmetic companies are increasingly exploring using cannabis extracts in skincare and wellness products due to the rising trend for natural and plant-based ingredients in personal care products.

By Distribution Channel

Online pharmacies are the dominant distribution channel for cannabis extracts in the pharmaceutical sector. The convenience, accessibility, and privacy offered by online platforms make them a preferred choice for many consumers. This segment's growth is being propelled by the adoption of digital and e-commerce technologies within healthcare settings. However, this segment faces challenges such as ensuring product quality, authenticity, and compliance with varying regional regulations.

Hospital pharmacies and retail pharmacies also play significant roles in the distribution of cannabis extracts, especially in regions with stringent regulations for online pharmaceutical sales. These distribution channels provide a trusted and regulated environment for patients and consumers to access cannabis extracts, ensuring quality control and compliance with healthcare standards.

Cannabis Extract Market Industry Segments

By Type

• Conventional
• Organic

By Extraction

• Solvent
• Solvent-Less

By Application

• Pharmaceutical
• Textile
• Cosmetic
• Paper
• Others

By Distribution

• Online Pharmacies
• Hospital Pharmacies
• Retail Pharmacies

Growth Opportunities

Increasing Demand for Recreational and Medical Purposes Fuels Cannabis Extract Market Growth

Extracts of cannabis to be used for medicinal and recreational purposes is one of the primary reasons for the rapid growth the market for cannabis extracts is experiencing. As more countries and regions legalize or decriminalize cannabis use, the market for its extracts has expanded quickly.

Medical professionals have come to recognize cannabis' therapeutic properties such as pain relief and anxiety reduction - leading to an explosion of demand; similarly, recreational users seek high-quality extracts for various experiences. This trend indicates a robust market expansion as cannabis extracts become more mainstream in both medical and recreational spheres.

Growing Demand for Cannabis Extracts in Cosmetics and Nutraceuticals Boosts Market

Cannabis extracts have seen rapid expansion across both cosmetics and nutraceuticals industries in recent years, as demand has increased dramatically. Consumers appreciate cannabis extracts for their anti-inflammatory and antioxidant properties - something skincare and beauty products often benefit from; in nutraceuticals, these extracts are prized for stress relief and overall wellness enhancement properties. Rising consumer awareness of these benefits drives market expansion; these industries continue to innovate their product lines to include cannabis extracts.

Cannabis Extract Market Regional Analysis

North America Dominates with 76.20% Market Share in Cannabis Extract Market

North America holds an overwhelming 76.20% share in the cannabis extract market due to the rapid legalization and acceptance of cannabis for both medical and recreational uses. The United States and Canada, being at the forefront, have seen a significant shift in consumer attitudes and regulatory landscapes regarding cannabis. The presence of major cannabis companies in these countries, focusing on research, cultivation, and innovative product development, significantly contributes to this dominance. Furthermore, the high-tech healthcare systems in these countries are a major reason for the demand for extracts of medicinal cannabis.

North American market dynamics are being driven by an increase in cannabis extract use for various applications such as pharmaceuticals, food and beverages, cosmetics, and wellness products. The region's sophisticated distribution channels and retail infrastructure allow for widespread accessibility of cannabis products. Furthermore, the ongoing research and development in cannabinoid science, backed by substantial investments, are rapidly advancing the market. Marketing strategies and educational campaigns also play a pivotal role in enhancing consumer awareness and acceptance.

Europe Is An Emerging Market with Growing Medical Acceptance

Europe’s cannabis extract market is emerging, driven by the growing acceptance of medical cannabis and gradual regulatory changes. Countries like Germany, the United Kingdom, and Italy are leading the way in the medical cannabis space, with increasing patient access and healthcare integration. Market growth is driven by increasing awareness and acceptance of cannabis extracts' therapeutic advantages.

Asia-Pacific's Potential Growth with Regulatory Changes

In Asia-Pacific, the cannabis extract market is nascent but holds significant potential for growth, contingent on regulatory changes. While traditionally conservative regarding cannabis use, countries like Thailand and Australia are beginning to explore medicinal cannabis. The region's large population base and increasing interest in alternative therapies present substantial opportunities for market expansion in the future.

Cannabis Extract Industry By Region

North America

• The US
• Canada

Europe

• Germany
• France
• The UK
• Spain
• Italy
• Russia
• Netherlands
• Rest of Europe

Asia-Pacific

• China
• Japan
• South Korea
• India
• New Zealand
• Singapore
• Thailand
• Vietnam
• Rest of Asia Pacific

Latin America

• Brazil
• Mexico
• Rest of Latin America

Middle East & Africa

• South Africa
• Saudi Arabia
• UAE
• Rest of the Middle East & Africa

Cannabis Extract Market Key Player Analysis

Cannabis Extract Market companies listed here represent key contributors that drive innovation and market trends in an industry experiencing rapid expansion. Tikun Olam and Aurora Cannabis are pioneers in medicinal cannabis extracts, focusing on research and development to provide quality products for medical use. Their strategic positioning in this segment underscores the market's emphasis on therapeutic applications.

CANOPY GROWTH CORPORATION and Tilray have established themselves as major players with extensive product ranges, including recreational and medicinal extracts. Their global expansion strategies reflect the market's potential for international growth amid changing legal landscapes.

Maricann Inc., Kynd Cannabis Company, and Organa Brands, while smaller in comparison, contribute niche products and specialized extraction techniques, showcasing the industry's diversity and adaptability. Colorado Cannabis Company and Peridot Labs are notable for their regional market presence and bespoke product offerings, highlighting the importance of localized strategies in a market with varied regulations and consumer preferences.

Cannabis Extract Market Industry Key Players

• Tikun Olam
• CANOPY GROWTH CORPORATION
• Tilray
• Aurora Cannabis
• The Cronos Group
• Maricann Inc
• Organigram Holdings Inc.
• The Cronos Group
• Aphria Inc
• Kynd Cannabis Company
• Organa Brands
• Colorado Cannabis Company
• Peridot Labs

Cannabis Extract Market Recent Development

• In October 2023, Avextra announced its plan to move forward with a double-blind Phase 2 clinical trial for the use of cannabis in the treatment of cancer patients in palliative care.
• In November 2023: The Georgia Access to Medical Cannabis Commission unanimously granted provisional licenses to four more companies: Fine Fettle GA, TheraTrue, Nature’s GA, and Treevana Wellness. These licenses allow them to produce low-THC oil to assist Georgians with severe ailments.
• In October 2023, UK food regulators, including the Food Standards Agency (FSA) and its Scottish counterpart, made a significant change to their recommendations regarding the daily dose of cannabidiol (CBD), a cannabis extract widely used in various products such as muffins and coffees.
• In August 2023, The German federal cabinet approved a draft bill for Pillar 1 of its cannabis reform strategy. The bill includes cannabis decriminalization with a 25-gram-per-person limit, legalizing the cultivation of up to three self-cultivated plants, and establishing mom-and-pop cultivation clubs with a 500-member maximum.

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