The cannabis industry is on a roll, as negative perceptions around the drug are fading with its legalization in more US states. Most US adults have used marijuana at least once and around 16% were frequent users by 2022—a higher (no pun intended) percentage than cigarette smokers. 

With cannabis legalization sweeping the US, the market is growing faster than a weed in a summer garden. The industry was valued at USD 25 billion in 2021 and is forecasted to almost double over the next five years. Investment activity also reflects this trend, with USD 526 million raised in 2022 and over USD 4 billion raised since 2017. 

It’s not all sunshine in the world of weed. While its expansion has gathered pace, more mature markets like Colorado and California are starting to slow down in the face of restricted banking and federal reform. Nevertheless, this is still an industry to watch, as more states opt for legalization and new markets emerge. 

In this Insight, we take a deeper look at the evolving industry surrounding the plant, including the legalization roadmap, underlying driving factors, value chain, competitive landscape, and risks to growth.