The global medical cannabis market is characterized by the presence of many global, regional, and local players catering to the demand created by increased research and development activities and financial support by various private and government organizations for cannabinoid research. The growing use of cannabis-derived drugs to treat chronic and severe diseases with no or few treatment options is making the medical cannabis market lucrative. The significant players have adopted the strategy of attaining regulatory authorizations from government agencies for their products as well as signing contracts and agreements to expand the reach and optimize operational costs. For instance, in May 2021, Aurora Cannabis Inc. (Canada) acquired Reliva, LLC (US), a leader in the sale of hemp-derived CBD products. This acquisition is assisting the Aurora’s in achieving significant growth in both the domestic and international markets. New players are entering the market with innovative products for the treatment of various chronic diseases. For instance, in April 2021, Cara Therapeutics, Inc. (US), announced topline results from its KARE Phase 2 dose-ranging clinical trial of Oral KORSUVA (difelikefalin tablets) for the treatment of moderate-to-severe pruritus in mild-to-severe Atopic Dermatitis (AD) patients.
The global medical cannabis market is highly competitive, with players competing and partnering and investing heavily in R&D activities to gain a substantial market share. The market is moderately fragmented with rising competition, product launches, increasing collaborative partnerships, and other strategic decisions that are undertaken to achieve operational efficiency.
The business model employed by the manufacturers in the global medical cannabis market includes manufacturing high-quality medical cannabis products locally to minimize operational costs. Mergers and collaborations were also observed to expand the company’s product portfolio, as well as the introduction of new products. The growth of prominent industry players is dependent on various factors such as market conditions, government support, and industry development. Key manufacturers of medical cannabis products are focusing on improving the efficacy of the products. Moreover, the market players are highly involved in promotional activities and marketing campaigns to promote their products. It has also been projected that the increasing legalization of medical cannabis products around the globe, combined with a rise in the use of cannabis for the treatment of chronic diseases, is fueling market growth.
According to the study's current scope, Canopy Growth Corporation (Canada) is the leading participant in the medical cannabis market, owing to its comprehensive product offering and widespread commodity availability. Cannabis Sativa, Inc. (US) is the second-largest player, followed by GW Pharmaceuticals plc (UK), Emerald Health Therapeutics, Inc. (Canada), and Tilray Brands, Inc. (Canada). Aurora Cannabis Inc. (Canada), Cara Therapeutics, Inc. (US), and Medical Marijuana, Inc. (US) are among of the industry's other major companies.
Threat of New Entrants
The threat of new entrants in the global medical cannabis market is moderate. Any company trying to enter the market is required to develop an innovative product as they are not allowed to replicate the existing product due to patent rights owned by developers and manufacturers. Moreover, many stringent rules and regulations are implemented by regulatory authorities for the manufacturing of drugs and similar products, which is limiting the entry of new players in the market. Furthermore, the lengthy process for product approval and legalization impacts the entry of new players into the market. The market is also characterized by a high degree of brand loyalty, where establishing a brand name is difficult for newcomers. Furthermore, the clinical trials involved in R&D are time-consuming, which does not comfort the new entrants to enter the market easily. However, the availability of research grants and funding for companies supports the market entry of new players.
Bargaining Power of Suppliers
The competition in the market is low due to the high number of manufacturers in the market. Moreover, the number of raw material suppliers is also high due to the increasing number of licensees. Advancements in production technology and rising production capabilities are observed in the industry. The raw material required for the manufacturing of medical cannabis is easily available. All these factors make the overall bargaining power of suppliers in the global medical cannabis market low. Additionally, companies operating in different regions are signing long-term agreements with suppliers from different countries.
Threat of Substitutes
The threat of substitutes in the global medical cannabis market is low. The products in the medical cannabis market act themselves as substitutes to available synthetic pharmaceutical drugs in the market, and buyer propensity to substitute is low. Many products are available in the market in different forms. Some small companies provide their products at a low price to sustain themselves in this highly competitive market.
Bargaining Power of Buyers
The bargaining power of buyers is high in the global medical cannabis market. The presence of buyers in the market is rising, as the awareness of benefits associated with medical cannabis products is increasing. The increasing adoption of cannabis-related products globally as an alternative to pharmaceutical drugs increases the bargaining power of buyers. Several companies are manufacturing products to meet the need of the growing target market. Many options are available in the market, which gives an advantage to the buyers.
Intensity of Rivalry
The degree of competition in the global medical cannabis market is high. The moderate degree of product differentiation among existing players increases the intensity of rivalry in the market. Companies involved in the medical cannabis market are trying to introduce more products and diversification of product lines. Additionally, many companies are focused on the R&D of products which further adds to the rivalry in the market.
