The cannabis market’s growth has been likened to the broadband internet industry in the 2000s. Growth rates, hype, and intense market interests are similar to the ado that was made over the World Wide Web’s birth.
A report by Arcview Market Research shows why all the interest is warranted. They note that the North American cannabis market hit $6.7 billion in revenue. This is a 30 percent increase from the previous year, and market experts are forecasting continued growth. Consumer sales are expected to increase by 700 percent compared to the fiscal 2016 year.
Global cannabis trends also show an upward trend
There has been much focus on the North American cannabis industry. But consumers worldwide are making their presence known. Last year alone, $150 billion was spent on cannabis, according to the president of Viridian Capital Advisors, Scott L. Greiper. Most of these transactions were not done legally. But as legalization becomes the norm, investors are jumping onto cannabis business prospects. From cannabis consulting services to cannabis delivery and point of sale systems, the market is the new Western frontier to entrepreneurs and investment groups.
Current state of cannabis legalization in the US
As of 2017, 9 states have legalized recreational or medicinal cannabis use, in varying degrees.
- Washington, DC
Three more states have adopted medical cannabis laws: Arkansas, Florida and North Dakota. And efforts are being made in Texas, New Mexico, Delaware, Missouri, Virginia, Rhode Island, New Jersey, and Vermont. While some of the initiatives and bills that are being proposed in these states are in for an uphill battle, the public at least is united in support.
According to polls, close to 90 percent of those surveyed support the use of medicinal cannabis, while 60 percent support its full use.
Canada’s legalizing of recreational marijuana
America’s neighbor to the north has consistently been a step ahead when it comes to its attitudes surrounding cannabis. In early 2017, Canadian Prime Minister Justin Trudeau introduced a bill to legalize recreational cannabis. The bill is scheduled to go into effect in 2018. This will make Canada only the second country after Uruguay to legalize cannabis for consumers.
Growers of cannabis will be licensed and regulated by the federal government. And each of the Canadian provinces will decide how cannabis can be bought and sold. There will also be cannabis equivalents of breathalyzers. These will be implemented to serve as a safeguard for drivers and heavy equipment operators. Other limitations will be instituted, as well.
For example, consumers must be 18 and over, and provinces can raise this age limit. Limits will also be placed on the amount that can be carried at one time. Households, too, are limited in the number of cannabis plants that can be grown on their property without a license. And, naturally, the growing and exporting of cannabis for sale without proper licenses will be a prosecutable offense.
Where to from here?
By optimistic forecasts, the legalization of recreational cannabis use is only a couple years away. Countries and businesses are figuring out ways to invest early. In the Netherlands, a bill has been passed that allows citizens the right to cultivate and sell cannabis with some restrictions. The first exchange traded fund of cannabis was created and launched in early April 2017. The Horizons Medical Marijuana Life Sciences ETF holds 14 stocks. This ETF is billed as a global fund, however, 10 of its holdings are based in Canada.
Consumer cannabis products will also see an increase in the type and range of product offered. Lotions and balms are a type of product that have been exciting interest in cannabis users. Topical cannabis has had great results in reducing pain in joints and muscles. Other benefits include lessening symptoms of certain skin conditions. Bath salts have been created to ease pain and stimulate relaxation. Acne treatments with CBD properties are being developed to reduce skin blemishes and improve elasticity in the skin. Shampoos, lip balms, and toothpastes have all been created and marketed containing CBD extracts.
Foodies have also been exploring how to tie public infatuation with cannabis into their specialties. So far, the market has seen gourmet cannabis-infused chocolate. Cannabis ceviche, cannabis rubs, and more.
Consumer products are at the front end. What’s going on behind the scenes? Investors are thinking in terms of creating software and products to help with the delivery and marketing of these products.