2020 was a tumultuous yet defining time for the cannabis industry. Despite the impact of the COVID-19 pandemic, Brexit, and the ever-changing legislation in Latin America and the US, it was still a winning year for cannabis.
More states legalized the use of cannabis, and cannabis stocks quietly performed well. New Frontier estimates that the cannabis industry will be raking in about $41.5 billion in revenue by 2025. That makes the next year crucial for businesses in the industry looking to capitalize on trends that could help them grow or solidify their market share.
In that light, here are the top five trends that will dominate the cannabis industry in 2021.
AI systems will transform operations
The growing and selling of cannabis have primarily been a relationship-based business, relying on a healthy relationship with nature, buyers, and law enforcement.
In 2021, the relationship between businesses and their customers with software is going to take center stage.
With the help of technology like automated indoor growing systems, growers will track everything from water levels and pH and the genetics of the plant, while retailers will have POS automation to help budtenders.
The inclusion of technology in the cannabis industry will improve plant quality and push profits in various avenues.
Branding is going to be a big focus
Legal cannabis brands are increasing by the day. The battle for market share is real and more companies are working to put superior and unique products out for their customers. Slowly by slowly, cannabis businesses are starting to build allegiances, putting a top-dollar value on branding.
A cannabis brand will need to do more than growing weed to survive in what is becoming a cut-throat business. Businesses are relying on superior strains, elegant packaging, and extensive social media marketing to build brand recognition. The race for the customer’s attention will continue heating up until, eventually, weed brands are just as recognizable as some of the home appliance brands.
Cannabis will go mainstream
With the legalization of cannabis, more major corporations are becoming comfortable trying out their hand in what was once a controversial industry. Expect to see some of the biggest and most successful brands in the beverage and tobacco sectors move to invest in cannabis to diversify their own products.
The growing cannabis industry has already attracted some top players like AB InBev, Molson Coors, Altria Group, Constellation Brands, and Scotts Miracle-Gro. As the billions in income continue piling up and the legal situation eases, more non-cannabis brands will continue considering partnerships.
Calls for federal legalization will get even louder
State-specific legalization measures have so far fueled the cannabis success story. The progress has attracted the attention of congress, and there could very well be an impending change around the corner.
The calls for federal legalization of cannabis have been resounding, which thus far led to the passing of a full-scale cannabis reform by The House of Representatives in December 2020 for the first time in history.
While this bill might not see the light of day, it’s a bright ray of hope for the things to come for the cannabis industry.
Increased demand for banking
The need to open up banking services for cannabis companies is long overdue. For the longest time, cannabis executives have had to consider alternative means of managing their cash flow. This coming year, it’s expected that the Senate could pass legislation that allows cannabis businesses to access banking, financing, and essential credit services.
The demand for banking and credit facilities is there, and indeed, banks and other credit unions must be itching to capitalize on the demand. This is why the calls for cannabis banking reforms will be at their highest this year.
Final Thoughts
It looks like 2021 will be the year that the fortunes of the cannabis industry finally turn around. Although these are pegged on a few factors, among them the pending Safe Banking Act, there are plenty of positive things expected of the cannabis industry, which should instill confidence in pot businesses.
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