A look at cannabis industry trends in 2020

Cannabis sales in 2020 will be robust, but consumers will be more educated and picky in their selection. The industry will face many difficulties, but here are some top trends to expect in 2020:

• There will be more legal states since public sentiment for cannabis is growing.

• Consumer’s preferences are evolving, cannabis companies will produce new products and strains to meet the demand.

• It is possible that customers will be older and female consumers will grow. Further, more customers will use cannabis for both its therapeutic and recreational benefits.

• People will be more aware of cannabis’s health benefits.

• More research and clinical studies are to be conducted to find treatment to ailments, including COVID-19.

• Aside from THC and CBD, scientists will study other cannabis compounds with medicinal benefits such as CBN, THCVm CBC, and CBG,

Expanded cannabis legalization

More states will open their doors to medical and recreational cannabis in 2020. 

Arizona, Arkansas, Connecticut, Montana, New Jersey, New Mexico, New York, and Vermont are exploring the possibility of legalizing cannabis for recreational use which may happen this year. The states of Alabama, Idaho, Kentucky, Mississippi, and Virginia recognize the therapeutic benefits of cannabis and are moving towards legalization for medical use. South Dakota’s petition is one-of-a-kind seeking legalization for medical and recreational use of cannabis at the same time.

Since demand is anticipated to grow, more land will be planted by big companies using sophisticated methods and technology. Prices will go down squeezing out small growers who are struggling to keep afloat from high tax burdens, strenuous regulations, and the pandemic.

Creative small businesses will find ways to make their product unique and stand out in the market that can be purchased at premium prices. As clients become smarter they will look for eco-friendly products with a social purpose.

Cannabis company consolidations

At the beginning of legalization optimism was high, cannabis businesses were pretty liberal when it came to capital expenditure, building facilities, and parting with their money to cash in on the green rush.

Unfortunately, things didn’t turn out as expected sales were way down the forecasted targets. 

Operational challenges associated with COVID-19 for many companies is just too extensive with their restricted resources.

Cannabis companies took a big hit from steep prices and consumers had difficulty purchasing cannabis after legalization which allowed the black market to prosper. Deaths from vaping choked the growth market, California and Oregon smart from an oversupply driving down prices.

With the euphoric giving way to the harsh realities of building a lucrative business, the troubled cannabis industry will see mergers in 2020 as capital is wasted, drop in stock prices, and low sales.

MedMen acquired PharmaCann in an all-stock deal that gave the combined entity accessibility to 79 retailers and cultivation licenses in 12 states. 

TerrAscend is supported by Canopy Growth, which added to its equity investment with an C$80.5 million nine-year loan at 6.10%.

iAnthus announced that they were purchasing the US assets of MPX Bioceutical, for a cool $1.6 billion. For iAnthus, it was their lack of revenue, whereas, for MPX, it was their lack of experience at the management level.

Digital cannabis manufacturing

The cannabis industry is experiencing transformation in manufacturing operations through big data and advanced technology. These new technologies are essential for companies producing large batches of medical and recreational cannabis to meet demand with quality products

Federal and state laws vary digitization is the most economical solution to cannabis manufacturing providing compliance to numerous regulatory requirements. It helps reduce unnecessary processes that lead to probabilities of human error and decrease costs.

It is a challenge to gather and keep accurate production records. Digitization computerized these activities which help the company lessen downtime and simplify any changes. 

Electronic records will ensure that products comply with the benchmarks and rejects are recalled. THC and CBD levels will conform with FDA requirements.

The manufacturing and quality departments are linked to ensure that products produced are top-notch.

Before it was a flower-based market, now consumers dabble with vapes, edibles, topicals, and therapeutic use. The landscape of the cannabis market is continuously changing, products and technologies should adjust to the needs of every type of customer. Extraction technology providers keep in step with the demand of consumers by finding ways to harness the magic of cannabis by producing innovative products with different terpene and cannabinoid blends.

Jobs in the cannabis industry to outnumber those in other sectors

Sales forecast for legal cannabis is expected to steadily increase every year to reach about $23 billion US dollars in 2025. 

A Leafly report estimates the cannabis industry in the U.S. has 243,700 full-time employees at the start of 2020, an annual increase of 15%. According to the Bureau of Labor Statistics, this figure is about three times more people employed by the beverage and tobacco companies.

Cannabis jobs will outpace all other occupations such as solar photovoltaic installers, wind turbine service technicians, and healthcare workers.

The Ohio Department of Commerce and Board of Pharmacy, the former monitors the state-licensed operation of marijuana cultivating and processing, and the latter oversees the activities of a marijuana dispensary. At the end of January 2020 Ohio has 2,637 active employees in the medical marijuana sector. And the job count will increase once the state hits $220 million in annual sales.

Amid the pandemic, the cannabis sector is hiring but dwindled as layoffs are common and the existing job openings are temporary.

CBD market will mature

The cannabidiol (CBD) compound in cannabis had shown so many health benefits such as pain relief, weight gain and reduction, regulating seizures, and anti-inflammatory among others. It’s no surprise that this was legalized for medical use and it’s now experiencing a boom.

CBD is being used in a variety of products from food, beverages, snacking to personal care. Two giant consumer packaged goods players, Coca-Cola and AB InBev are eyeing cannabis infused beverages.

Nobody wanted the pandemic to take place, but when it did cannabis edibles benefitted from the situation. There was a spike in sales, consumers turned to edibles since it has reduced face contact when ingesting.

The media played an important role, medical cannabis was hyped as a medical wonder for its therapeutic benefits that traditional cannot provide. People who see cannabis as harmful changed their views.

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(Featured image by Tree of Life Seeds via Pexels)

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