Allied Market Research: Global Cannabis Market to Generate $149B by 2031

PORTLAND – A report recently published by Allied Market Research projects the global Cannabis market will reach $148.9 billion by 2031, up from $25.7 billion in 2021 – a nearly sixfold increase over a decade, compounding at 20.1% annually. For the industry that spent most of the 20th century in legal exile, those figures represent a structural transformation that is still mid-course.

The analysis covers the full product spectrum and segments the market by compound type, including THC-dominant, balanced THC-CBD, and CBD-dominant products, as well as by application, splitting out medical and recreational use.

The product-level breakdown tells its own story. Cannabis extracts claimed the largest product segment in 2021, generating $13.8 billion, and are projected to reach $82.3 billion by 2031 at a CAGR of 20.4%. Concentrates have become the preferred format for a growing share of consumers, particularly in mature recreational markets where potency and precision dosing carry a premium.

On the application side, the recreational segment held the dominant market share in 2021, but the medical segment is expected to post the fastest growth rate, at a CAGR of 21.1% through the forecast period. That inversion is worth noting. Recreational Cannabis drove early market expansion, but the longer-term commercial engine may well be medical as clinical evidence accumulates, physician acceptance broadens, and patients with chronic conditions seek alternatives to conventional drug therapies.

Geographically, North America remains the dominant region, projected to reach $104.4 billion by 2031, underpinned by legalization across the U.S. and Canada. The LAMEA region (Latin America, the Middle East, and Africa) is expected to outpace all others, growing at a CAGR of 32.3%. That figure reflects how much runway remains in markets that are only now beginning to build regulatory frameworks from scratch.

The macro context complicates the optimism in places. In the United States, federal reform is advancing along multiple fronts simultaneously [medical and adult-use cannabis, alongside hemp-derived cannabinoids, are increasingly being treated as distinct regulatory categories] rather than through a single comprehensive overhaul. That fragmentation creates real friction. Banking access remains constrained. Interstate commerce is prohibited. Tax structures vary dramatically by state.

Rollback campaigns are underway in states like Massachusetts, Maine, and Arizona, where ballot measures could test whether voters are willing to reconsider legalization after years of regulated markets. At the same time, adult-use Cannabis is now legal in 24 states, Cannabis tax revenue has reached $25 billion nationally, and the U.S. industry alone is expected to approach $47 billion in 2026.

What is driving growth in 2026 is regulatory refinement more than outright expansion: better licensing systems, compliance standards, and structured taxation models that are delivering the long-term stability the sector has long needed. That maturation comes with trade-offs. Despite revenue growth, the industry took a more structured approach to hiring, with full-time equivalent jobs dipping modestly to 425,002, a recalibration attributed to margin pressure from oversaturation and high tax burdens.

What the forecast does confirm is direction. The Cannabis industry is not contracting, consolidating into irrelevance, or fading into a regulatory footnote. The question is execution speed: how fast legal frameworks mature, how soon banking normalizes, and how effectively operators convert consumer demand into sustainable margins.

For investors and operators, the report published by Allied Market Research offers a useful frame, not a guarantee. A $148.9 billion market by 2031 is achievable. However, in an industry where regulatory momentum can reverse in a single election cycle, the distance between projection and reality is measured in policy decisions as much as in consumer and societal behavior.