DECEMBER 31, 2020 (CANNABIS TECH) A few prominent trends predicted for 2020, which have now become a reality.
Earlier this year, no one suspected there would be gains in any industry, aside from those into the production of health safety equipment and tools.
However, one of the fastest-growing industries globally – the cannabis industry, assuaged many of the concerns. Despite the predicted economic downfall, there was still a projected soar in the market value of cannabis, and its products, even at the peak of the global situation.
Accurate to the projections and despite the storm, the once elusive industry is still making its mark on the world; and it will soon be on an explosive wave.
MORE CANNABIS-TECH COLLISION
With the world moving towards digitalization, many companies, especially manufacturing industries, are leaning towards automation; which comes as no surprise as cultivation needs must be met and met optimally. As many industries have turned to automate their processes, others strive to join the race to remain in the competition.
On a trend like this, cannabis is no exception because, coupled with the current health regulations regarding social distancing, the industry’s automation technology is increasing rapidly, from the cultivation and manufacturing sectors to the retail and distribution segments. This expansion is most likely a result of the understanding that producing effectively and efficiently requires precise and specific environmental conditions and adherence to health safety regulations. As it is now, robotics, automation, and artificial intelligence are quickly taking hold of the industry to facilitate its development and progress.
Aside from these, manufacturers are also leaning towards providing healthier and more efficient means for consuming cannabis products. However, a few of the released innovations/inventions have experienced certain drawbacks leading to questioning and even suspending such products. Broad acceptance and further legalization of the plant are hinged on finding final and lasting solutions to adverse consumer situations.
LEGAL STATUS AND CONSOLIDATION
2020, the year of a whole lot of happenings and even more incidences for the cannabis industry. Before now, many states in the United States especially had to depend on the state’s legislation on cannabis regulation, but now there is a high possibility for federal legalization, strengthened further by an international backing for the U.N’s rescheduling of the drug, post the 2020 presidential U.S. elections. With this happening, there will be a less strict rule to register individuals to operate in the cannabis niche. However, as some regulations relax, others will start: ensure the proper check-and-balance of quality grade and the distribution cycle, like the International Organization for Standardization, which remains valid even now.
After the passage and signing of the 2018 Farm Bill by Donald Trump, the FDA forbade industries and manufacturers from laying claims to the medicinal and therapeutic benefits of cannabis, and cannabis-derived products, curbing the market progress of the drug. Nevertheless, there is hope that current progress will result in a subsequent increase in the acceptance and understanding of the drug and its constituents.
However, regarding the consolidation, due to the high risk that comes with a growing venture as cannabis, many banking systems are not yet prepared to offer start-up loans and other forms of business loans to small enterprises within the niche. Due to the lack of access to banking, the small enterprises will be bought up by the bigger ones, probably due to the need for vertical integration, according to the Green Fund.
This consolidation is to occur in three phases: smaller enterprises been bought by the larger ones, as is already happening, larger enterprises merging or acquiring each other, and the eventual federal legalization of marijuana in the United States.
INCREASED USE IN CONSUMABLES
Thanks to the movements towards the legalization of cannabis on the federal and international level, another trend picking up is: the increased variety of cannabis products. In January 2020, the monthly legal cannabis sales of products in Canada – one of Europe’s largest cannabis markets – had risen to $154.2 million from $54.9 million of the previous year. By mid-year, stocks had increased further to $201 million.
As the consumer base widens and the industry matures, coupled with the increased health awareness, the average cannabis user will be more discerning and conscious about where, how, and who produces the cannabis products they consume. This approach shows that cannabis is no different from the regular organic supplements; after all, the best full-spectrum kind is cultured on natural soil – in a 100% organic way.
The year 2020 has no doubt come with many events and promises, and even as we near the end of the year, could there be more in stock for the world in the cannabis niche? Well, we will have to find out. However, it comes without saying that; investing in the cannabis industry is now the next big thing worldwide.
Come back tomorrow for 2021’s first podcast of the year, as Matt Carr from the Oxford Club joins host, Kristina Etter on A Tech Moment to talk about the investment outlook for 2021.