The economics of cannabis: who's really profiting from it?

Although the cannabis industry has seen incredible growth in recent years, large corporations are still reaping more financial benefits than small businesses and entrepreneurs, says Thomas Walker.

- Thomas Walker

The legalisation of cannabis has sparked a financial revolution. Once an underground market, it has been transformed into a multibillion-dollar industry. More and more regions across the world have begun to embrace medicinal and recreational cannabis, with economic implications that are vast and multifaceted. It does, however, raise an important question: who is profiting from the industry?

Driven by a wave of legalisation in various countries, the cannabis industry has seen incredible growth in recent years. The global legal cannabis market was valued at approximately $21 billion (about R380 billion) in 2023, and an estimated annual growth rate of 25,7% is expected from 2024 to 2030.

A robust economic ecosystem has been created by this rapid expansion, generating revenue and creating employment and investment opportunities. However, distribution of these financial benefits is concentrated unevenly across the industry landscape.

CORPORATE GIANTS AND INVESTORS

Large corporations are on the top of the profit pyramid, as are investors who have seized the opportunities presented by cannabis legalisation. Canopy Growth, Aurora Cannabis, and Tilray are household names in the industry and attract significant capital from private equity venture firms.