Look at the cannabis industry in 2021
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At the beginning of 2020, cannabis industry insiders expected it to be a very big year, but then COVID-19 hit and everything changed. The global pandemic has brought some delays and some positive surprises for the industry and will continue to have a significant impact on the industry in 2021.
Here are five key cannabis industry expectations and trends to look out for in the year ahead.
Federal decriminalization and possibly more
President-elect Joe Biden and Vice-President-elect Kamala Harris have publicly stated that decriminalizing cannabis will be a top priority for the new administration. This is the first major step in realizing other significant legal changes at the federal level. For example, it opens the door to improved banking for cannabis and cannabis companies, and possibly future federal legalization.
This month, Congress voted to decriminalize and tax marijuana at the federal level and give cannabis companies access to credit. Of course, it remains to be seen what happens when the bill goes to the Senate. In the House of Representatives, only five Republicans supported the bill and six Democrats opposed it.
Extended legalization = growing US market and more jobs
Cannabis was a big winner on election day 2020. In every state where the legalization of cannabis (recreational and / or medical devices) was on the ballot, residents voted in favor of the measures. Voters in Arizona, New Jersey, Montana, and South Dakota approved recreational cannabis, and voters in South Dakota and Mississippi approved medical marijuana.
Because adult cannabis is legal in almost a third of the states in the country, the majority of Americans have access to medical marijuana and / or recreational marijuana. The momentum shows no signs of slowing down. The US market is growing fast, creating jobs, and helping the economy. There is no reason to believe that this growth trend will slow down in 2021.
Acquisitions and Consolidation
Fragmented auxiliary service companies are expected to begin consolidating in 2021 as larger brands with deeper pockets attract smaller players. As stated in Cannabiz Media’s 2020 Point of Sale Software in the Cannabis Industry Report, “With 10 point of sale companies controlling 80% of the market, the remaining 58 will be hard pressed to thrive. “
The same goes for cannabis license holders as smaller pharmacies, growers, and other businesses across the supply chain are taken over by larger multi-state operators (MSOs). We have seen MSOs like Columbia Care, Trulieve, and Curaleaf acquire and consolidate smaller players, and this trend will continue into the future.
As the market grows, so does the need for brands to differentiate themselves in the minds of consumers in 2021. For example, licensees can no longer rely on Budtender to recommend their brands. Instead, companies must make strategic investments in order to establish a brand position and have that place in the market.
The aim is to motivate buyers to ask about specific brands by name by educating them about key differentiators and benefits. When shoppers have the right knowledge to make informed purchasing decisions, the brands that invested in positioning and differentiation win by gaining more shelf space and sales. This applies to the entire supply chain.
Cannabis as the new normal
In some states, cannabis was viewed as a significant industry during the COVID-19 quarantine. If you do the math, it’s not hard to say that cannabis is becoming more mainstream by the day. Consider this equation:
Significant industry name during the COVID-19 pandemic + changed public perception + more legalization of states + a new presidential administration = a growing future of opportunities for the cannabis industry for companies and consumers
Key takeaways about the cannabis industry in 2021
While 2020 brought unexpected challenges for the cannabis industry, it also brought new opportunities that pave the way for even more growth in 2021. One thing is certain in the next 12 months – the business, political and social environment is more favorable to cannabis than ever.
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