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2019 is already proving to be a big year for the cannabis industry. More states are expected to legalize medicinal and recreational cannabis. Here are five predictions for the cannabis industry this year.
In 2018, several big-name alcohol and tobacco brands began partnering with cannabis companies or started their own ventures in the industry. Mirroring this development, many pharmaceutical companies could make strategic investments in the industry due to rising demand for CBD products. It appears to be a natural fit, as CBD is used for conditions such as cancer, anxiety, depression, chronic pain, Parkinson’s, glaucoma, and more.
Micro-dosing is a trend that’s gaining popularity because it allows the user to experience the benefits of cannabis without the psychoactive effects that can interfere with daily routines. While it is popular with older consumers, many new users would find this method beneficial because it promotes health and wellness as well as responsibility and moderation.
Last year, the popularity, accessibility, and use of CBD products rose across the country. This trend is likely to continue in 2019 thanks to the passage of the 2018 Farm Bill, which legalized hemp farming nationally. Since it is now legal, hemp and the CBD derived from it are becoming very profitable. The well-known health benefits of CBD are also setting the industry up for impressive growth this year.
While the federal government currently prohibits interstate commerce of any cannabis products due to its classification as a Schedule I narcotic, momentum is growing for interstate commerce in Oregon. In 2018, overproduction in the state saw cannabis prices drop by 40 percent, and there is plenty of demand in other states where recreational and medical cannabis are legal. The Craft Cannabis Alliance is campaigning for a plan first proposed in 2017 that would allow interstate transfers of cannabis products with adjacent legal states that comply with specific testing, packaging and labeling rules, as well as regulations established by partner states.
Even though the original bill died in Oregon’s House of Representatives, the Craft Cannabis Alliance believes Oregon’s production levels combined with marijuana’s growing popularity are enough for a second look by state legislators. This means that if the bill is passed, interstate commerce could happen once federal lawmakers ease regulations.
The marijuana industry is seeing more investments from companies, and this trend could continue in 2019.
Institutional investors like Goldman Sachs and JP Morgan advising companies investing in cannabis signal that the adults are entering the room and the industry is growing up. For their part, cannabis companies will need to forecast numbers and then solidly perform. That means scaling the business to meet demand while keeping spending in check. That’s been a problem for companies who have been losing money even as they win business licenses.
The scrutiny will be positive for the industry, separating those companies backed by a viable business plan and disciplined leaders from startups who flourished thanks only to hype.
No matter what happens, everyone should expect the competition among cannabis companies to increase even as we wait for more regulatory dominos to fall during 2019. Companies that build strong brands, spend wisely and stay focused on consumers will be in a position to capitalize on the considerable growth opportunities that will open up this year and beyond.