Which leaders will make up the cannabis industry’s space race?

By Andrew Ward

How billionaires like Elon Musk,Jeff Bezos and Richard Branson Race for space, who will lead the burgeoning cannabis industry when it reaches astronomical heights?

Operators in different parts of the cannabis industry offered Benzinga their takes. Providing various answers, mostly less focused on the people than on the brands and companies that might go to the moon.

Photo from rawpixel.com

Predicting the shape of the cannabis space race in its early stages

The cannabis space race is still in its infancy and currently offers no clear answers. The uncertainty leaves room for plenty of speculation and hypotheses.

Olivia Alexander, CEO of the global online CBD boutique Kush Queen, compared the industry to the dot-com bubble.

“At this point the industry is so young with so much room for innovation and expansion that it is very difficult to say how many players there will be once the market matures and develops fully at the federal level,” said Alexander.

Marco Eadie, managing director of O’Keefe consultancy, said that well-capitalized companies have an advantage over smaller players. “Bigger companies will be much more strategic about their capital,” he said. Eadie added that market variables such as government licenses and capital access will hamper businesses.

Alexander believes the number of players in this space will depend on which companies can successfully navigate the turbulent space while building a reliable consumer base.

Large MSOs may have to turn around if vertical integration does not become part of federal law. Trevor Fencott, CEO of Fire & Flower Holdings Corporation (OTC: FFLWF) believes that vertical integration will not last and separates the industry into product and distribution companies.

“Vertical integration is uncommon in most other industries, and we believe the same will apply to cannabis,” said Fencott.

If so, there will be an “inevitable” consolidation on both sides of the market. As with other industries, he expects significant consolidation to result in three to five global players in each market segment, mirroring many other industries.

Photo by Kevork Djansezian / Staff / Getty Images

Seth Worby, co-founder and managing partner of the Cannabis Creative Group, believes that legalization will ultimately result in the current actors being downsized as large corporations take part in the action.

“You will find cannabis companies with impressive sales potential, brand equity and operating standards – and you will get them at a premium, too,” said Worby.

Non-cannabis brands are largely expected to become market leaders

Both today’s major cannabis brands and leading non-cannabis companies could become the ultimate space race leaders in the industry.

The market leaders that Worby predicts are ultimately determined by size. “Large companies such as Pfizer Inc. (NYSE: PFE), Johnson & Johnson (NYSE: JNJ), Procter & Gamble Co (NYSE: PG), etc., which have existing sales and facilities in similar markets, will quickly be at the forefront of this race once government legalization occurs. “

He added that companies with experience in recreational marketing such as Anheuser Busch Inbev SA (NYSE: BUD) and Molson Coors Beverage Co Class B (NYSE: TAP) will also enter and renew space after federal legalization.

“These type of conglomerates have stayed out of the industry due to federal status and restrictions, but that doesn’t mean they’re not gearing up for a move,” added Worby.

Photo by VictoriaBee / Getty Images

Roger Bloss, CEO of the cannabis holding companyMJ Holdings, Inc. (OTC: MJNE) believes Jeff Bezos will be in the running too, with Amazon.com, Inc. (NASDAQ: AMZN) likely to become a sales dominator. Aside from Amazon, he sees brands that excel in both medical and recreational areas to become a market leader.

Leading cannabis brands weren’t completely excluded from the conversation. Eadie saw increased market caps and double-digit growth from Curaleaf Hldgs Inc. (OTC: CURLF) and Canopy Growth Corp. (NASDAQ: CGC) as a sign of their strength. He also liked private companies, including Gage cannabis and the continued focus on growth.

“Every rising star has to differentiate itself in this highly competitive market through groups such as Harvest Health & Recreation Inc. (OTC: HRVSF) and Verano Holdings Corp. (OTC: VRNOF) continues to acquire unique cannabis-related companies to strengthen their portfolios, ”said Bloss.

This article originally appeared on Benzinga and was republished with permission.