Of course, $5 billion is an enormous amount of money compared to $316 million. The former number is a middle-of-the-road estimate of how big the Canadian recreational marijuana market could be in Canadian dollars; the latter number is the estimated size of the Canadian medical marijuana market just in 2017. Some say the actual market size could be significantly larger.

But there are several countries other than Canada that allow legal use of medical marijuana. And we don't even have to include the U.S., which still prohibits marijuana at the national level, although many states have legalized use of the drug for medical and/or recreational use. Could the international opportunity for medical marijuana sales make the Canadian recreational market look like only chump change?  

Marijuana covering part of a globe

Image source: Getty Images.

Some really big numbers

If you think $5 billion is a lot of money, consider some of the estimates that have been floated for the global marijuana market. London-based Prohibition Partners published a report that projected the potential European medical marijuana market could be worth $42.8 billion annually.

This report also predicted that there's a 50% chance that some European nations could legalize recreational marijuana within a few years. If that happens, the report suggests that the potential recreational marijuana market in Europe could be $24 billion annually.

Market research and consulting firm Ameri Research projects that the global marijuana market will grow to $63.5 billion by 2024. Nearly half of the market, however, will come from U.S. sales. A rough calculation using the Ameri Research estimate provides a marijuana market outside of North America of more than $25 billion. That's significantly lower than the Prohibition Partners figure, but it's still a big amount -- especially in comparison to the projected size of the Canadian recreational marijuana market.

Austria, the Czech Republic, Denmark, Finland, Germany, Italy, Portugal, Poland and Spain have already legalized use of medical.  So have several other countries across the world. Canadian marijuana growers have already begun to target several of these global markets.

Canopy Growth (NASDAQ:CGC), for example, has a German subsidiary and forged partnerships to supply marijuana to Australia, Brazil, Chile, Denmark, Jamaica, and Spain. Aurora Cannabis (NYSE:ACB) has also looked to international markets, with over 21% of the company's revenue in the latest quarter coming from medical marijuana sales in Germany. 

Tiny figures pushing wheelbarrows full of marijuana buds on top of money

Image source: Getty Images.

The devil's in the details

But how accurate are the huge global medical marijuana market projections? Drilling into the details gives a better perspective of the realistic prospects.

The Prohibition Partners report made the assumption that most European nations would pass legislation that legalizes use of medical marijuana. While that assumption could prove to be accurate, it's not the reality for now. Europe includes 44 countries, the majority of which don't currently allow legal use of medical marijuana. 

We can use Canada as a gauge, though, of how large the medical marijuana market could be in countries that have already legalized use. As mentioned earlier, the estimated Canadian medical marijuana market in 2017 was $316 million. Canada's population is around 35 million. That translates to roughly $9 per capita in medical marijuana sales.

Using that benchmark, the medical marijuana market in Germany should be worth close to $740 million annually -- by far the largest in Europe. Including the other European countries with legalized medical marijuana, the total European medical marijuana market size would be in the ballpark of $2.4 billion.

Of course, there are countries outside of Europe that have also legalized medical marijuana. If we used the $9 per capita benchmark for other nations to which Canopy Growth is targeting, for example, another $2.3 billion could be added to the potential global market size. 

The global medical marijuana market is certainly significant. However, at least using Canada's experience as a guide, it's not yet as large as some project. 

No chump change

Now for some caveats. The Canadian medical marijuana market continues to grow rapidly. That $9 per capita sales metric will almost definitely need to be revised upward in the future.

Also, there is a good chance that more countries will legalize medical marijuana. I think Prohibition Partners is right that there are reasonable odds more European countries will legalize recreational marijuana. And we can't rule out the real game-changer: the possibility that the U.S. will eventually legalize marijuana at the national level or at least modify federal laws to allow states to make their own decisions.

Still, though, as things stand right now, the coming legalization of recreational marijuana in Canada is the biggest single catalyst for which marijuana stock investors should anticipate. If Canopy Growth, Aurora Cannabis, and others can grab similar market share in the recreational market as they have in the medical marijuana market, their sales will skyrocket. I expect that will happen. And I don't think a $5 billion market for recreational marijuana in Canada is chump change at all.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.