In the United States, it is expected that medical cannabis revenues will overtake recreational use revenues in the next four years.
Recent analysis on medical cannabis finds the total market revenue in the United States is expected to grow from US$5.32 billion in 2017 to $10 billion in 2022, at a compound annual growth rate (CAGR) of 13.6%.
Even though the Food and Drug Administration (FDA) has approved only a few medical cananbis-derived products, there will be a strong growth trajectory over the next few years.
Much of the current medical cannabis revenue is presently generated in states where the use of cannabis plant products for medical indications has been legalised. Revenue projections suggest that the medical segment of the market may surpass the recreational revenue segment in the next four years, as patients in states where cannabis is legal look for alternatives to opioids to treat their chronic pain.
Consulting and research firm, Frost & Sullivan, has recently released its analysis, US Medical Marijuana Market, Forecast to 2022, which provides an assessment of trends, challenges, and growth opportunities.
"Several pharmaceutical companies are working on the development of cannabidiol (CBD)-based receptor agonist drugs. To do so, they need to be aware of the guidelines the FDA sets for the approval of these drugs to advance the therapeutics to the market," noted Barbara Gilmore, Transformational Health Senior Consultant at Frost & Sullivan.
"The FDA advisory committee recently approved a cannabinoid receptor agonist drug called Epidiolex, which when launched will be the first FDA-approved, CBD-derived drug on the US market for the treatment of epilepsy."
Cannabinoid-targeted small-molecule drugs, such as Cesamet, Marinol and Sativex, have been approved for the treatment of numerous medical conditions. In US states where medical cannabis has been legalised, prescription pain drug use has markedly reduced, especially opioids. Medical cannabis-derived products have the potential to treat pain, which could significantly curb the out-of-control opioid epidemic gripping the nation.
Billions of dollars are being invested in cannabis research across the globe to study the effects of cannabis on different medical conditions.
Restraints in the market include the risk of patient medical registry data where medical use is permitted and the lack of understanding from physicians about cannabis since they might not have completed medical cannabis coursework in medical school. One of the major concerns of the FDA is that the lack of standardised testing of cannabis plants is making it difficult to evaluate the test results that are normally required for drugs approved for human use.
Nevertheless, healthcare companies are willing to invest.
"Pharma and big tobacco companies have the regulatory and FDA process understanding coupled with large amounts of capital to invest in innovative products, processes, systems, and devices related to the cannabis market to take products developed in this space to the next level. For instance, the tobacco giant Philip Morris has even invested $20 million into Syqe Medical to support the development of technologies that help reduce smoking-associated health risks," explained Gilmore.
Meanwhile, in New Zealand legislation is changing to allow local cultivation, research and development on cannabinoid therapeutics. The country's most prominent biotech startup in this space is Helius Therapeutics. The company has raised NZ$15m in Series A capital to develop world-class cannabinoid research facility in Auckland.
Further information on this analysis can be found here.