2020 Cannabis Industry Predictions – The Future Looks Green
2019 was a tough year for cannabis, but 2020 is filled with new opportunities. Although the industry faced a barrage of uphill battles, U.S. cannabis retail sales continued to skyrocket into the $12+ billion range for 2019, proving that the demand for cannabis and hemp products is still at an all-time high. As the industry continues to grow, cannabis will undoubtedly face more challenges. With the knowledge gained from past blunders, the industry as a whole and future medical or adult-use states can now make more informed decisions moving into 2020. We sat down with leaders in the cannabis industry during MJBizCon 2019 at Podcast Row to discuss their 2020 cannabis industry predictions. Check it out!
With legalization on the horizon for a handful of states, the much-awaited implementation of new laws in mature markets and the continuous increase of cannabis-informed consumers, 2020 is filled with optimism. Check out these 2020 cannabis industry predictions and let us know what you think in the comments below!
CONTINUATION OF STATE-LEVEL LEGALIZATION
Various states will consider adult-use or medical cannabis legislation in 2020. In 2019, New Jersey and New York failed to pass initiatives due to disagreements over regulation, budgeting, taxation and social equity (or lack thereof). After last year’s disappointing losses with New Jersey and New York, the industry is looking towards the Northeast in hopes of adult-use legalizing in these states in 2020.
Oklahoma advocates are working on collecting 178,000 signatures to include an adult-use initiative on the 2020 ballot. New Mexico is in the process of revising a bill that could legalize adult-use cannabis in 2020 as well.
With a booming medical market, the industry is watching Florida for adult-use movement, although recent roadblocks with signature accessibility may hinder legalization in Florida in 2020.
Cannabis advocates are also hopeful Virginia, Arizona, Missouri, among others may legalize adult-use cannabis in the near future. Medical conversations are starting in Alabama, Mississippi, South Dakota, Nebraska, South Carolina and possibly Kentucky. If you’re interested in lobbying for medical or adult-use cannabis in your state, check out the Marijuana Policy Project to find out how you can help.
FEDERAL LEGALIZATION STAND STILL
Unfortunately, it’s unlikely the MORE Act or SAFE Banking Act will pass in 2020. The MORE Act, which aims to deschedule cannabis on the federal level and provide reinvestment services to those adversely affected by the War on Drugs, is in the initial bill introduction stage. With a majority Republican Senate and vocal opposition of the act from Republicans, it faces a long, uphill battle to become a bill.
The SAFE Banking Act, which showed promising bi-partisian support in early stages, is now slowing its progress as U.S. Senate Banking Chair Michael Crapo (an Idaho Republican) publicly announced he does not support the bill as-is. While this came as frustrating news to many, the act isn’t completely off the table — it will just take longer than 2020 to finalize.
Although the two promising acts aren’t likely to pass in 2020, the federal conversations have started, which is an optimistic outlook for the future. In addition, the 2020 presidential election could help or hinder the future of these bills, depending on the elected nominee.
Tech has already made its way into cannabis and will continue to do so over 2020. Initially, dispensaries dealt largely in cash as banks refuse to conduct business with a federally illegal entity. Now, more and more retail cannabis locations can accept debit card payments, thanks to cashless ATMs (point of banking system) and online payment processing companies. Businesses will likely continue to expand their payment options to include cards in 2020 as consumers value cashless options both at dispensaries and across retail platforms.
Online ordering is a popular method for consumers as well, and retail cannabis locations are taking note. While dispensaries must still check proper identification, many dispensaries are offering online ordering systems for faster pick-up at the location. Online ordering not only saves time, but it also gives consumers the privacy to research the products offered and make an informed decision without the pressure of in-person shopping.
With the recent vape epidemic, consumers are pushing for more transparency in the products they consume. Tech companies like Lucid Green (among others) are offering solutions to product transparency by allowing the consumer to track the supply chain information, potency and dosage information for legal products. We’ll likely see the trend of transparency through tech in 2020 continue.
CBD COOLS OFF AS OTHER CANNABINOIDS COME INTO FOCUS
CBD took center stage in 2019 as brands flocked to offer CBD-infused products of every kind imaginable. The non-mind altering cousin to THC, CBD provides a host of medicinal benefits without the “high” of THC infused products. With the barrage of CBD products coming to the market last year, the CBD market will inevitably cool off in 2020 as poorly-made and non-tested products fizzle out.
CBD was a big hit in 2019, but with over a hundred other known cannabinoids in the cannabis plant, lesser-known compounds like CBG, CBN, THCv and others will gain traction as the benefits for each become more well-known.
Each cannabinoid has its own handful of medicinal properties, and consumers value personalization when it comes to health and the retail experience. We’ll likely see a shift towards more comprehensive cannabinoid product offerings in 2020.
TALK OF TERPENES
Cannabinoids aren’t the only compound stealing the spotlight, however. Terpenes and their effects are becoming more well-known and popular among cannabis consumers. Previously (and still largely today), retail locations list the sativa/indica distinction as a means of reporting the effects of a strain. Research shows that the sativa/indica distinction plays less of a role in the effects as we previously thought. Instead, cannabis connoisseurs are looking more closely at terpenes, the aromatic oils that provide the identifying smell of a strain. Terpenes are found in other plants as well. For example, the popular terpene limonene is found both in cannabis and citrus fruit. Similar to aromatherapy, terpenes may contribute to the overall effect of the strain. While more research is needed to identify to what extent terpenes affect the experience, they will likely remain a point of conversation for cannabis enthusiasts well into 2020. We’ll likely see a shift in some brands from reporting the sativa/indica distinction to displaying a more extensive report of cannabinoids, terpenes and the overall effect of the strain.
INVESTMENTS TIGHTEN UP
In 2019, the industry saw a handful of cannabis business evaluations fail to meet their mark. While cannabis is still an incredibly lucrative and exciting landscape, investors are proceeding more cautiously before funding new opportunities. Over-evaluations caused in part by the green rush, along with mismanaged teams and lack of a proper growth structure, caused some businesses to flop in 2019. As the industry is at its largest and most profitable yet, it’s not a sign of the industry as a whole. However, investors will proceed more cautiously in the future with new ventures and will likely spend more time evaluating companies and requesting records of proven profits before pulling the trigger.
CONVENIENCE IS KING
Although it’s taken quite some time to enact, Colorado is finally allowing cannabis hospitality licenses in 2020. For consumers, this is a huge and long-awaited relief. Up until the introduction of this new law, private residences were essentially the only legal locations for cannabis consumption in Colorado. For out of town visitors or those who simply prefer not to consume in their own home, this was a major hurdle. Now, cannabis consumption lounges will become available in Colorado. Some consumption-friendly restaurants and lounges have already popped up in California, and the trend will likely continue in 2020. Safe, legal places to consume are a no-brainer for legal states and are a much-needed convenience for consumers.
In addition, Colorado passed a bill that will allow cannabis delivery, another milestone that California, Nevada, Oregon and Massachusetts already have in place. Although Colorado’s delivery plan won’t likely rollout until 2021, the trend towards offering more consumer conveniences will continue throughout 2020.
2020 is both the start of a new decade and the beginning of a new era for the cannabis industry. As the market continues to mature, we can expect both obstacles and opportunities to arise throughout 2020 and beyond. If you’re interested in staying up to date with the latest cannabis industry news, make sure to subscribe to our newsletter below!
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