Need a solution to automate distribution and compliance activities in cannabis? Have you looked into cloud ERP?
The cannabis industry is booming, though where it’s headed is currently a topic of debate. Several experts claim to be able to predict the next big shifts in the market, yet few were able to chart the explosive rise of the present medical, adult-use and CBD sectors. However, there are still certain factors that many observers agree will affect the next cannabis industry trends.
Cannabis is a maturing market that is still facing federal prohibition, growing medical marijuana demands, and a slowly warming but cautious approach to the introduction of adult-use legalization to consumers. Trends developing in 2019 into 2020 will become the deciding factors in the future of the cannabis sector.
Here are the 10 most important emerging cannabis industry trends right now:
1. Cannabis Market Growth
The biggest and arguably most public piece of news regarding the cannabis industry is the sheer amount of money it is generating. The cannabis market is expanding exponentially as several states in the U.S. continue to slowly loosen restrictions on medical marijuana distribution, and locations with medical cannabis dispensaries already in place begin to enable adult-use products to be sold. Canada’s announcement to end adult-use prohibition on the federal level created a noticeable boost in stock prices across the Canadian side of the industry.
2. Industry Visibility
The expansion of the cannabis industry and its burgeoning legal acceptance is propelling it increasingly into the public space. However, individual cannabis businesses are still hampered by controlled substances advertising laws that place restrictions on or outright prevent them from marketing their products. This may change as legalization and rapid market growth lend legitimacy to larger cannabis SMBs, enterprises and equity firms in the public eye.
3. The Effect on Other Verticals
The cannabis sector’s expansion is putting it in competition with other markets, specifically vice products such as alcohol and tobacco. In states where cannabis prohibition was lifted, beer sales have seen a decline, as have binge drinking rates. Whether it is because of the industry’s effect on their sales or the growth it is experiencing, several alcoholic beverage producers have announced the introduction of product lines containing cannabinoids – which leads into the next big cannabis industry trend.
4. Big Corporations in Cannabis
Attitudes have shifted so much around the status of the cannabis industry that corporations dominating other consumables markets are making plans to enter as well. Johnson & Johnson, Coca-Cola, and other recognizable brands are looking into pharmaceutical, beverage and edible products that include Cannabinoids such as CBD and even THC. Others are establishing partnerships with or buying stakes in existing cannabis businesses to create inroads into the market.
5. New Cannabis Consumer Products
The popularity of CBD-infused products is growing enough that multiple brands are beginning to take advantage, as mentioned above. CBD-laced consumables are seen by many consumers as healthier alternatives to traditional products in established sectors, such as sugary beverages and dietary supplement pills. Other growing product lines include CBD coffee, confectionery and beauty products.
6. Vertical Integration
A combination of the above factors and complex regulatory issues is prompting both larger existing cannabis businesses and corporations seeking footholds in the market to establish vertical value chains in medical marijuana sectors, or create the foundations to do so in emerging adult-use venues. These developments may help the industry earn additional public trust, but it can also place smaller growers and distributors at a disadvantage against these fully integrated supply chains.
7. Transition to Adult-Use Cannabis
The gradual lifting of prohibition for CBD, medical and adult-use products is overall good news for the industry as the regulatory shift can alleviate several supply chain and compliance burdens for growers and distributors. However, legalization will still bring virtually the same level of legal oversight, if not more as the concerns over the cannabis industry’s effect on consumer segments remain. cannabis businesses in areas being opened to adult-use must contend with exposure to new audiences and compliance pain points that come with them – namely ensuring that product marketing and distribution does not affect minors.
8. Health Safety in Cannabis Products
As the cannabis sector grows, it is inevitably going to become susceptible to the same concerns of other consumables markets. One of these is the origin and safety of cannabis products, the former of which can be both helped and hurt by existing seed to sale regulations and processes. This cannabis industry trend imposes additional data stream requirements, but the additional visibility and insight delivered by implementing better traceability will lend to fulfilling consumer and regulatory demands.
9. Cannabis Education
A growing demand also brings a growing demand for information on cannabis, whether for the industry’s business practices, for each individual product, or for the plant itself. Universities in states where either medical or adult-use prohibition has been lifted are already offering accredited courses around cannabis subjects and a few even offer degrees for specific industry professions. Courses featured include cannabis law, cultivation, and laboratory science.
10. Technology Will Drive the Future of Cannabis Industry
New cannabis entrepreneurs quickly realize that in order to compete as a modern industry, they must apply modern solutions – which means integrating technology into their business processes. Several start-ups have emerged on the periphery of the industry to deliver applications for both business owners and consumers. However, cannabis business technology that provides the most value to growers, distributors and retailers captures seed to sale visibility, ensuring compliance with traceability regulations.
Invest in Seed to Sale Management Technology to Leverage These Cannabis Industry Trends
Compliance is a driving factor in all sectors of the growing cannabis market and will only become more important as state governments deploy untested regulatory guidelines in emerging adult-use areas. The burden of these legal experimentations will fall on growers, distributors and retailers in these locations, and even those in existing medical marijuana and CBD markets.
Read through these three key methods for fulfilling compliance with Acumatica, a flexible cloud ERP software solution that enables cannabis businesses to achieve full seed to sale visibility.
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