The nicotine and cannabis markets continue their evolution and are expected to reach a combined USD1.2 trillion in value by 2029. It becomes critical to separate the noise from actionable insights to clarify which strategies are helping companies and countries worldwide capture opportunities. This report aims to highlight the central issues in the industry, informing equitable conversations and strategies. Tags: Tobacco, Cannabis
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Regulatory pressures continue to compound in the nicotine space, with many tobacco control initiatives focusing on accessibility and visibility of tobacco products. However, there are some cases where harmonisation has legalised specific markets and potential pulls towards deregulation or less strict government involvement, as is the case in the US. In cannabis, there are still efforts for reform, including legalisation and experimentation around access models.
The nicotine market continues to expand beyond combustion and face challenges from illicit markets, both in traditional combustion categories, but even more in illicit or non-compliant e-vapour products. A second wave of illicit RRP products could further complicate the situation. For the cannabis industry, market development continues its steady but sure progress with more consumers and markets and clearer rules for the market.
Tobacco companies experienced positive performance, driven by both combustion products and developments in RRP products worldwide, with nicotine pouches and HTP being the primary growth engines. In the cannabis industry, the most important companies reported positive, albeit tempered, performance, signalling a cooling cannabis landscape. There is, however, renewed interest in the hemp-derived market in the US.
US tariff hikes and trade policy uncertainty are complicating the global economic outlook, which is projected to see real GDP growth slow to 2.9% in 2025 and 2026, down from 3.2% in 2024. Trade tensions are dampening business and consumer confidence. A pessimistic scenario could reduce growth by 0.6 percentage points in 2025, while tariff easing could increase it by 0.2 percentage points.
Passport Tobacco covers the seven major tobacco categories: Cigarettes, Cigars & Cigarillos, Smoking tobacco (made up of Pipe tobacco and RYO tobacco), Smokeless Tobacco (snuff and chewing tobacco), E-Vapour Products (closed and open); Heated Tobacco; and Tobacco Free Oral Nicotine. Smoking paraphernalia such as pipes, rolling papers, lighters or matches, etc., are not included, nor are nicotine replacement therapy (NRT) products, which are part of Euromonitor's Passport Consumer Healthcare database.
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