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6 Cannabis Market Predictions That Are Already Coming True

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6 Cannabis Market Predictions That Are Already Coming True
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What will legal weed look like in the next few years? These cannabis market predictions are already coming true.

With new products, untapped markets, and better access to research and capital than ever before, the cannabis market is in the midst of another record-breaking year of growth.

Overall, 2018 was a groundbreaking year of growth for the cannabis market. But expect the industry to expand through 2019 and into 2020 as a volatile market becomes more stable and mainstream, encouraging unprecedented investor and consumer confidence.

Here’s what investors and consumers should expect as the cannabis market matures.

The CBD Market Will Explode

CBD, also known as cannabidiol, a nonpsychoactive compound found in cannabis and hemp, came to the fore in 2018.

Specifically, the CBD market, which includes oil, gummies and other topicals, is expected to triple by 2022, according to New Frontier Data. This would make the market worth an estimated $1.3 billion, up from $390 million in 2018.

Explaining the CBD Boom

  1. Research and personal accounts show that CBD can help assuage everyday aches and pains and help treat serious medical conditions like epilepsy, Alzheimer’s disease, and more.
  2. Cannabidiol does not get you high. This means that unlike adult use marijuana, consumers can take it without unwanted effects.
  3. Though classifies as part of the cannabis market, CBD can be found in hemp, which is subject to an entirely different set of regulations.

In other words, cannabidiol can be produced legally and sold widely without contradicting federal law.

This translates to less stigma for consumers and a chance for producers and retailers to legally sell a cannabis product in all 50 states.

More States Will Legalize Cannabis

2018 saw a record year for cannabis legalization. But keep in mind that only ten states (and Washington D.C.) have actually legalized recreational cannabis, and fewer still have laws governing its sale in place.

An additional 33 states total have medical use in some form, though inner-state restrictions apply.

In 2019, expect the cannabis market to continue to grow with more medical and recreational legalization. Specifically, a few markets are predicted to pass legislation in 2019 and 2020:

  • New York
  • New Jersey
  • Minnesota
  • Connecticut
  • Rhode Island

In other words, the East Coast and the Midwest are set to experience a cannabis market boom similar or larger to that on the west coast.

Research and Investment in the Cannabis Market Will Persist

The recreational market is only part of the cannabis market; Medical is a growing sector, too.

There are two main reasons why pharmaceutical research will progress:

  1. The FDA approved the first cannabis drug, GW Pharmaceuticals PLC- ADR (NASDAQ: GWPH)'s Epidiolex, in 2018. This has paved the way for other pharmaceutical companies to investigate cannabis with hopes of FDA approval.
  2. The Farm Bill legalized hemp in all 50 states. This will spur the study of CBD (and non-psychoactive cannabis more generally) in 2019.

There are few cannabis pharmaceuticals on the market. However, a growing number of cannabis-related patents are filed by pharmaceutical companies.

Canadian Legalisation Will Take Full Shape

According to a national survey released by Statistics Canada, weed consumption plateaued in the fall of 2018.

  • Only 15 percent of Canadians consume cannabis, similar to the previous quarter.
  • More men and fewer women reported consuming weed.
  • 43 percent stated that they still buy weed illegally.

This is due to a few factors that restricted access.

  1. The retail rollout has been slow.
  2. Supply shortages and delays were an issue.
  3. Edibles and concentrates are not yet legal.

All this is set to change. Producers are consolidating and growing thanks to more investment. And the legalization of edibles is planned for late 2019.

There is a lot of room for growth in the Canadian cannabis market in 2019 and 2020.

Companies Consolidate and Compete in the Cannabis Market

As with any maturing market, consolidation is coming to the cannabis industry. This has already began in Canada where large producers are expanding and buying up the competition.

South of the Canadian border, expect to see more brand development and growth, spurred by larger markets and more access to capital.

In 2019, the first weed producer went public on a major U.S. exchange. Other plant-touching and non-plant touching companies followed.

Today, it’s increasingly common for weed businesses to go public in America, and easier than ever to do so in Canada. Recently, Aurora Cannabis Inc (NYSE: ACB) filed a preliminary prospectus to raise up to $750 million.

For investors and businesses alike, this means an unprecedented amount of capital for expansion.

Expect More Investment from Outside Industries

With less stigma and more opportunity in the cannabis market, large non-weed corporations are taking an interest.

Specifically, beverage, tobacco, pharmaceutical, and alcohol companies, as well as large-scale retailers, are getting involved at various levels of the supply chain. This can mean:

  • Creating a cannabis product
  • Partnering for distribution
  • Selling infused products
  • Investing capital and resources

Today, companies are less afraid to take a vested interest in what is now America’s fastest growing industry.

Predicted Growth Across the Global Cannabis Market

Legalization and market maturation are slow processes. While the majority of Americans and corporations eagerly anticipate a booming cannabis market, fine-tuning the legislation that would legalize it is slow and arduous.

But make no mistake: Market growth is accelerating. Expect to see more legalization, consolidation, research, and products.

Additionally, recent developments like Canadian legalization and CBD are transforming the industry. All signs indicate that the growth that began in 2018 will continue well into 2020.

Related Stories:

Meet The 3 Biggest Industries Investing In Cannabis

The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Photo by Javier Hasse.

Read more about our latest Cannabis News! CANNABIS HOME

Posted-In: cannabis market CBD marijuanaCannabis Education Markets General Best of Benzinga

 

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