With the first quarter now on the books, we’re taking a look back at the 2018 cannabis market and how a few key trends will affect the industry throughout 2019 and beyond. The current forward momentum indicates the cannabis industry will continue to flourish, but we may see it change in some unexpected ways.
2018 – A Great Year for Cannabis
Last year, several U.S. states legalized medical and/or recreational marijuana and Canada opened the doors to nationwide recreational use. It was a great year for the industry as a whole due to increased acceptance and legitimization which helped to reduce its social stigma. Many cannabis companies witnessed exponential growth, while other companies closed their doors amid changing regulations and supply and demand uncertainties.
Looking Ahead
Beyond the enthusiasm of 2018, there’s a lot of interest in how the industry will evolve going forward. Investors from within the cannabis industry are not alone as the marijuana marketplace is becoming an attractive investment arena to outside investors. We will continue to see an increase in upstart companies while existing cannabis companies will take advantage of new opportunities created by the market.
Social Consumption
Cannabis will get social in 2019 as recreational marijuana markets open in more jurisdictions and cafes and social clubs become the norm. Improved social stigma has more people willing to partake in groups and in public.
Marijuana-friendly venues in cities like Vancouver, Las Vegas, San Francisco and Denver are on the rise. Some are already enjoying “weed tourism” dollars by hosting marijuana-inspired destination events which often include visitor centers and educational tours. Weed tourists can expect to see more travel options to emerge, including weed-infused weddings, fine dining and nature hikes. Edibles and beverages are the usual attraction at these events, so we expect to see cannabis tourism evolve as edibles and beverages become more commercially available.
New Products
New products are likely to take the cannabis industry by storm with edibles (including beverages), vapes, CBD and convenience becoming market drivers in 2019.
With so many ways to consume cannabis, eating and drinking it offers more social opportunities for consuming. Innovative new edibles and beverages options are in various stages of development and will make a splash in 2019. While we don’t expect to see any of the national beverage corporations taking big steps into the cannabis market, the beverage industry is expected to reach $600 million in business by 2022. New options include, but are not limited to tea bags, coffee, powdered mixes, and cannabis beer.
Some categories in the edibles market may suffer a decline in sales as CBD-infused beverages become popular, especially once those products surface on store shelves beyond the dispensary. Once President Donald Trump signed the Farm Bill into law in December, cannabidiol, or CBD, began showing up in a range of consumer products from lattes to dog snacks. CBD products will continue to have a substantial impact on the industry well beyond 2019.
With more than 30% of all cannabis sales in California in 2018 coming in from the vape category, expect other states to see follow suit. Consumers are reaching for vapes due to their convenience and the array of products options, none of which include a lighter, pipe, papers or combustible smoke.
Speaking of convenience, cannabis consumers need it and are demanding it. In addition to consuming the products conveniently, they want to be able to buy conveniently. Legal cannabis purchases in some places have been wrought with problems, creating a burden for consumers. We expect to see retailers cater to the customer with more brands and buying options, which includes the rise of cannabis delivery services.
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