Estimating the size of the global drug market: A demand-side approach

The size of a market is based on factors influencing both demand and supply. Changes in market size, therefore, provide valuable information about the net effects of movements in both parts of the market. For example, while the number of users may decrease in response to a prevention policy targeting initiation, total expenditures may simultaneously increase due to factors shifting more light users into heavy use or an increase in supply. Therefore, estimating the size of the market, in terms of both participants and expenditures, is critical to fully understanding the impact of interventions intended to influence demand and/or supply.

This report uses data on the prevalence of drug use, retail prices, and consumption patterns to generate country-level consumption and retail expenditure estimates for cannabis, heroin, cocaine, and amphetamine-type substances. Major findings include:

• Global retail expenditures on cannabis to range from €40B-€120B. Our best estimate is close to half of the previous global estimate of approximately €125B.
• Exporting cocaine hydrochloride from Colombia to consuming countries generates a value of no more than €10B annually (import price-replacement cost). The equivalent value for opiates exported from Asia and the Americas is no more than €20B.
• Surprisingly little is known about typical quantities consumed of illicit drugs, which makes generating demand-side estimates difficult. For cannabis, much could be learned by adding a few questions to existing surveys. For harder drugs, arrestee surveys can provide a wealth of information.