(Photo by Ben Zimmerman, Las Vegas Event Photography)
First, thank Chris Walsh and his team for organizing another amazing MJBizCon. Chris has opened the stage by addressing the industry’s current state, mainly from a US perspective, with relevant information on what goes right and wrong. For example, the US has a strong entrepreneurial approach that contrasts with Europe’s public health approach. Nonetheless, policymakers and companies around the globe should consider these learnings to develop their local markets.
On the one hand, medical and recreational sales in the US are skyrocketing, and there is no indication that sales will slow down in the years to come. But on the other hand, the real new states are opening up their markets, and growth rates are strong in these new markets. Also, it seems that more and more rather conservative states are voting in favor of Cannabis.
Lately, there has been huge public interest in Cannabis, e.g., from the Major Baseball League (MLB), which has just accepted a huge CBD company, Charlotte’s Web, as a new sponsor. Moreover, in Florida’s Circle K gas stations, patients can buy medical Cannabis soon, while Uber Eats will deliver cannabis products in Canada. Apart from that, P. Diddy is joining the cannabis industry, and Biden is freeing cannabis consumers who are still in jail due to federal law enforcement. Internationally, Germany’s move to open up to recreational Cannabis is seen with excitement, as more countries in Europe are likely to follow that move.
On the other hand, mature markets such as Colorado, Washington, and Oregon are stagnating. Product prices are declining as retailers use more aggressive discounting strategies. Many large companies are struggling, which may lead to a consolidation phase next year. Some states have voted against Cannabis legalization, and minorities and women are still heavily underrepresented in the industry. Delta 8 and other cannabinoids derived from hemp are sold within a legal limbo without regulation and quality control. The macroeconomic factors are not helping either, with a war in Ukraine, supply chain issues, inflation, and fewer investors willing to invest in this space.
In Canada, where recreational Cannabis has been federally legalized, consumers have access to more and more retailers and cannabis products, and more products are available compared to last year. Still, most large companies do not earn money, and a massive oversupply of flowers will persist over 2023. In addition, 57% of sales are estimated to be happening in the legal channels. In comparison, in California, where a heavy sales tax is applied on cannabis products, around 80% of sales are still happening in the illicit market.
Nineteen states have not decriminalized Cannabis, and people are still arrested for consumption and sales. However, in 48 states, Delta 8,9,10, or other cannabinoids derived from hemp have been found in smoke shops, gas stations, and grocery stores. That may become a massive issue for the legal cannabis industry. The only way to eliminate this problem is to legalize Cannabis federally, enforce a healthy (not heavy) tax and educate consumers about the plant. Companies in the current environment can only survive with strong operational capabilities and the capacity to innovate in this progressively maturing market.
Daniel Kunisch, Founder Trade Green Consulting
Trade Green Consulting was founded in 2019 with the mission to foster quality life and well-being around the world. We achieve this by connecting the global supply chain in the cannabis industry. With a focus on quality brands and products, we create sales opportunities and solve problems that may arise along the way.
Over the last few years, we have established ourselves as an agency supporting medical Cannabis and CBD brands with their market entry and sales strategy. Trade Green Consulting began as the continuation of the founder, Daniel Kunisch, who helped to elevate the European CBD industry through education and marketing in the early days.