The size of the prize

The global medical cannabis market is already big and getting bigger

With governments around the world increasing access for those with chronic health conditions, the medical cannabis market is one of the fastest-growing industries in the world.

While it is clear that the global medical cannabis market is increasing, estimates of the exact size of the international medical cannabis market vary greatly:

• The global medical cannabis market size was estimated to reach a value of US$13.4billion in 2018. The market is further expected to reach a value of US$44.4billion by 2024.
  
• Medical Marijuana Market size is set to exceed US$55.0 billion by 2024.
  
• The global legal marijuana market is expected to reach USD$146.4 billion by the end of 2025.
  
• Barclays suggests that the global cannabis market could be worth USD$272 billion by 2028.

Closer to home, research from The AgriBusiness Group into the New Zealand market concluded that if just 1% of the New Zealand population obtained a prescription for medical cannabis, the market could be worth $379 million each year.

What is the return?

The New Zealand medical cannabis industry is in its infancy, and revenue and profitability data just doesn’t exist. What we do know is that countries like Canada and the U.S. have seen great returns for investors in medical marijuana businesses.

A look at Canada’s 20 largest cannabis companies shows impressive returns, with an average forecast revenue multiplier of 4.8 and an average forecast EBITDA multiplier of 15.9. 

Puro has been conservatively valued at $23.4million, using an EBITDA multiplier of 2 for the 2021 year and accumulated losses from the initial 2020 year.  If the average Canadian multipliers were used to value Puro it would result in valuations between $98.9 million - $199.4 million, demonstrating the potential significant upside for investors.

While it’s very early days in the New Zealand medical cannabis market, we do know that the upside is enormous. It’s clear that national and international markets present extraordinary growth potential. Puro is ready and waiting to capitalise.

Want to be part of Puro? Our PledgeMe campaign kicks off 6 November 2019.