The cannabis market has reached a tipping point and is showing all the signs of an unstoppable juggernaut.
The signs are many, including:
- Legalization is spreading at an accelerating pace.
- The number of dispensaries is increasing exponentially.
- Deals and investments are multiplying.
- Big Alcohol, Big Tobacco, Big Finance, and Big Pharma have entered the market.
- Big brand names like Coca Cola, Heineken, and Coors are entering the fray.
- A vast new legal hemp market has sprung open.
- A new generation of cannabis consumers is emerging.
Deals, Deals, Deals
As mjbizdaily reports, based on the number and size of the deals that were done, the year 2018 will go down as “a massive milestone for cannabis companies.” According to Viridian Capital Advisors, 557 deals raised over $13.5 billion in 2018, compared with 378 deals that raised $2.7 billion in 2017.
Constellation Brands made waves with its $4 billion investment in Canopy Growth Corp. But Altria topped that deal with a $13 billion investment in vape company Juul, a deal that followed two weeks after Atria’s $1.8 billion investment in Cronos Group.
A key trend in the U.S. is the rapid expansion of large publicly traded cannabis companies through the establishment of multistate operations. This is the modus operandi of Acreage Holdings, Curaleaf, Green Thumb Industries, MedMen, and Trulieve—which are the five largest multistate cannabis operators with the greatest market capitalization.
The big news in 2018 was the legalization of cannabis in Canada. In the U.S., Maine, Michigan, and Vermont legalized recreational cannabis. Medical cannabis is now legal in 33 states and Washington D.C., and recreational cannabis is legal in 10 states and Washington D.C.
As increasing numbers of territories legalize cannabis, resistance to legalizing cannabis is crumbling. At least seven U.S. states are leaning towards joining the recreational ranks as government leaders in New York, New Jersey, Connecticut, Pennsylvania, Ohio, Virginia, and New Hampshire push for legalization.
Around the world, bans are being lifted to legalize cannabis and allow trade. Most recently, Bermuda announced that was lifting a regulatory ban on marijuana investment funds, while Israel’s parliament approved a law to permit exports of medical marijuana.
At year’s end, Thailand’s National Legislative Assembly voted to legalize medical marijuana and allow cannabis research. This follows on the heels of South Korea, Argentina, and Australia legalizing medical cannabis.
As Forbes notes, U.S. drug policies influence those of foreign nations, and the legalization of cannabis in the U.S. is having a contagious effect worldwide.
Doubling Down on Dispensaries
The rapid expansion of the cannabis market is reflected in the exponentially multiplying number of dispensaries. Connecticut officials approved nine new medical cannabis dispensaries, which doubles the state’s existing number. New Jersey also doubled its number of medical cannabis dispensaries from 6 to 12.
Pennsylvania issued 23 new medical cannabis dispensary licenses, raising the state’s total to 79. Nevada issued 61 new recreational marijuana retail licenses, which nearly doubles that state’s number. Missouri plans to have 192 medical cannabis dispensaries open by 2020.
Michigan, which legalized recreational cannabis in 2018, approved 91 new medical cannabis licenses, including 45 dispensaries. Massachusetts opened its first recreational cannabis dispensaries, while the first medical cannabis dispensaries were licensed to open in Arkansas, Ohio, and Virginia.
Hemp Is Back
After an 81-year ban, the legalization of hemp in the U.S. became official when President Trump signed the 2018 Farm Bill on December 20. The ability to grow, process, and sell hemp products will unlock a wealth of new opportunities.
As Vox reported, not only will farmers coast to coast benefit from a new cash crop, but the CBD industry, which sold about $350 million worth of products last year, is projected to hit $1 billion in sales by 2020.
Hemp becomes legal at a time when the demand for CBD oil is exploding. As Jason Williams of Wealth Daily notes, “CBD sales are growing faster than anyone could have predicted — faster than pretty much any other part of the cannabis market.”
And as Hemp Industry Daily reports, “CBD-rich hempseed is legal now, but it’s also rare, giving plant breeders a huge new market as barriers to national hempseed distribution are removed.”
Cannabis research is flourishing as biotech companies discover new medical uses and legal cannabis-based drugs are made available to patients. A historic landmark was reached in 2018 when Epidiolex was approved by the FDA, a move that caused cannabis to be reclassified by the DEA.
After five decades of barren neglect, the U.S. Congress is moving to fund and facilitate medical cannabis research. Besides a new Medical Cannabis Research Act bill, the U.S. federal government plans to award $1.5 million in grants during the 2019 fiscal year to researchers who study how components of marijuana other than THC affect pain.
Cannabis Crosses the Consumer Chasm
As the surging sales and supply shortages in the U.S. and Canada show, the demand for legal cannabis is strong. Consumers are taking advantage of the diverse medical and recreational cannabis products coming to market, including smokables, edibles, beverages, ointments, lotions, and suppositories.
Not only are veteran cannabis users taking advantage of legalized cannabis products, but a new generation of “canna-curious” people are becoming cannabis consumers.
As headynj.com notes, as legalization takes hold, “the doors have opened up to a whole new tribe of people” who are experimenting with cannabis and making informed decisions.
This includes senior citizens, a group that tended to be anti-cannabis in the past, but who are now embracing cannabis chiefly for medical reasons. An example is Rossmoor’s Medical Marijuana Education and Support Club in California, where scores of seniors are experiencing the benefits of medical cannabis. These seniors are not only becoming consumers, but pro-cannabis activists as well.
Helping consumers cross the cannabis chasm is Francis Ford Coppola, who has complemented his wine products by launching a cannabis line called The Grower’s Series. The first product is a kit that sells for $99, which is aimed at “individuals who are wine drinkers who may be intimidated by cannabis by leveraging some of the same language.”
Mainstream commercialization is causing the cannabis market to become more sophisticated, refined, and upscale. As Leafly notes, legalization has brought maturity, innovation, professionalism, and credibility to cannabis.
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