Cannabis industry trends evolve faster than most markets. Not only haven’t regulations been finalized, but methods of consumption, investment and the geography of the market itself are in constant flux. Here are some industry trends you should pay attention to:
- Cannabis industry trends indicate higher sales than ever
The biggest of all cannabis industry trends for the next few years is the national and global expansion of the legal weed market. The global recreational cannabis market is projected to reach $31 billion by 2021. The CDB market alone could reach $22 billion by 2022 according to a Brightfield Group report.
The weed consumer demographic is growing ever more diverse. The average cannabis consumer is now middle-aged, with more women and seniors consuming weed in its various forms. This means that the market is growing and demand within the market is shifting to alternative products.
- Marijuana Products are gaining market share
Marijuana has been traditionally consumed by smoking, but some people curious to try marijuana but unwilling to smoke it are turning to edibles. Expect one of the most significant cannabis industry trends to lean towards other methods of consumption.
Vapes: Vapes or otherwise known as “electronic cigarettes” were one of the hottest cannabis products in 2019. In the first quarter of 2018, vape sales grew 69 percent total, according to BDA Analytics. CBD vape sales alone rose 105 percent over the same period.
Edibles: Edible forms of marijuana of the CBD and THC variety are booming in popularity across all legal states. These include edibles in the form of gummies and chocolates which are increasing becoming popular among young people.
Beverages: Though classified as edibles, consumers and investors are giving infused beverages more attention than ever. The following trends indicate that beverages will become bigger in the next few years:
- Big investors including Anheiser Bush and Coco Cola have entered into talks to invest in infused beverages
- Weed companies are already manufacturing products like hangover proof beer infused with THC.
- Beverages containing CBD for medicinal benefits are also increasingly popular, like lattes and smoothies infused with cannabis oil.
- Massive CBD market growth
In 2019, we saw the rapid expansion of the CBD market and was among the most notable cannabis industry trends. With an annual growth rate of over 140 percent, the CBD market could eclipse the adult-use marijuana market by 2022. This is largely due to the passage of the 2018 Farm Bill which legalized hemp farming (the cultivation and growing of marijuana) nationally.
With its new legal status, hemp and the CBD derived from it are now legal and lucrative to produce. Compound that with CBD’s reputed health benefits and the CBD industry is set for impressive growth.
- A flood of investment
One of the cannabis industry trends shaping the entire market is growing investment from all sides. Large non-weed-related corporations are increasingly likely to invest in legal cannabis in the form of distribution deals, product design or investment in producers.
It’s not just corporate players who are investing. Individuals looking for a way to cash in on the cannabis boom can simply purchase stocks. With eye-catching growth over the course of 2018 that has continued into 2019, weed stocks are attracting investor and media attention. This is especially true for large Canadian weed producer stocks.
Both plant-touching and non-plant touching weed businesses are listed on Canadian and American stock exchanges. This means more access to capital and bigger operations than ever.
- Product Variety and Branding
Above all, the cannabis industry trends towards a more sophisticated customer base that wants a variety of products with different effects, potency levels and prices. One manifestation is the growing demand for luxury products in both wellness-focused CBD products and a larger-than-ever adult use market. These include items like luxury skincare products, high-quality edibles, and organic options, all of which is driving an ever-sharper focus on branding.
The two best-known cannabinoids, CBD and THC, aren’t the only aspects of the plant attracting attention from producers and consumers alike. Terpenes, which are organic compounds that give weed its flavor and odor, are a growing focal point.
As the market grows in size and product diversity, people want access to products with a variety of flavors. Terpenes are easier to taste and therefore more important than ever with the rise concentrates.
- Legal weed spreads eastward
The one cannabis industry trend that encompasses all the others is the expanding geography of the legal marijuana industry. Every state that legalizes instantly creates a major new industry. For example, socially conservative Oklahoma, ranked just 28th in population among the 50 states with slightly fewer than four million residents, legalized medical marijuana in 2018. Within a few months the demand for medical marijuana cards swamped state regulators, who have registered more than 3,000 marijuana related businesses.
States that are at least considering legalizing medical marijuana, if they have not done so already, are expanding existing programs. For weed businesses, this means shifting their attention from the West to the East Coast as opportunities emerge in untapped markets.
When New York legalizes it will be the single largest recreational market in the country. This will translate to big dividends for the businesses who capture even a small part of that market first. Keep in mind, starting a cannabis dispensary can be more profitable in newer markets than in already saturated ones. Above all, the most significant among all cannabis industry trends are continued growth and change.