Big Changes Are Coming to the World of Weed - Will it Make Things Better or Worse?
The legal marijuana industry, both personal and medical, saw $2.7 billion in sales last year, according to industry investor networking entity ArcView Group and its research arm, ArcView Market Research. The group says that figure is expected to grow to more than $10 billion by 2020 as recent medical marijuana states go online and as more states legalize marijuana between now and then.
The figures come from ArcView's recently released report, The State of Legal Marijuana Markets, 3rd Edition. At $450 a pop, it's priced for would-be marijuana mavens, but the report's executive summary is available for free. There is lots of good information for industry watchers, including a review of what ArcView thinks are five trends that are helping to redefine the industry. They are:
1. Innovative delivery systems. We're not talking about drones or delivery services here; we're talking about the forms in which marijuana is sold. Edible sales are going through the roof, not to mention cannabis oils. As ArcView puts it, "The marijuana flower is no longer the dominant market force for innovation."
2. Multistate licensing. Companies that want to be national players can't remain wedded to one state, even if it is California. "Strong national cannabis brands are finding ways to emerge in a state-segmented market," ArcView notes.
3. Product testing. In the black market, people tested the stuff the old-fashioned way: by smoking it. But with legal marijuana commerce comes regulation, and as ArcView notes, "States are beginning to require product potency and contaminant testing to ensure consumer safety and new laboratories are emerging to meet those needs."
4. Brand building. We're seeing this already, with famous folk like Willie Nelson and the Bob Marley estate hopping on the weed wagon. "Cannabis brands are no longer hiding in the shadows and the branding bar is rising fast," ArcView notes. Snoop Dogg better get on this!
5. Changing landscape of cultivation. Goodbye mom and pops? This could be a real concern for areas with long-standing traditions of black- or gray-market small-scale cultivation, such as Northern California. It would be a cruel irony indeed if the people who have been growing for years or generations end up getting squeezed out by deep-pocketed newcomers. But as ArcView puts it, "Licensed cultivation facilities are becoming much larger and that's creating opportunities and challenges in meeting the needs of these new businesses and the fast growing demand for legal cannabis."