The State of the Cannabis Industry: Current Highlights and Challenges
What will the future of the cannabis industry look like?
As cannabis reform continues to take hold on national and international levels, many people are unsure of what to expect in the coming weeks and months – and rightfully so.
Over the course of just 2017 alone, we’ve witnessed monumental victories and challenges taking place in the cannabis space.
Under the current Trump administration, many professionals fear for the future. While others remain optimistic. No doubt, there is a lot of uncertainty in the air.
Chris Walsh, editorial director at Marijuana Business Daily, tackled these uncertainties during his speech at the Emerald Conference. His 30-minute talk covered points like:
- The current state of the cannabis industry
- Future financial projections for adult-use and medical markets
- The banking situation for cannabis companies
- What could happen to the cannabis industry under President Trump
- How regulatory changes will impact the industry
So what does this mean for cannabis professionals and newcomers? Are we likely to see a crackdown on cannabis or will the market flourish? Here’s what you need to know.
Industry Growth on the Rise
Thirteen new cannabis markets will be emerging in coming years. The four adult-use markets include California, Massachusetts, Maine, and Nevada. The other nine medical states include Arkansas, Florida, Hawaii, Louisiana, Maryland, Montana, North Dakota, Ohio and Pennsylvania.
According to Chris Walsh, new cannabis markets may bring annual retail revenues between seven to eight billion. In addition, they will also create between 100,000-200,000 new jobs. While no doubt the numbers may change, these projections are conservative.
In fact, the outlook for the California cannabis market alone is astonishing. In three to five years after retail sales start, California cannabis may be generating between four and five billion dollars in revenue. This would make California the largest legal cannabis market in the world.
However, California only represents, albeit a large, but single portion of the market. Other states such as Massachusetts and Nevada are projected to generate between 450 million to 750 million in retail sales.
Should the Trump administration not crackdown on the cannabis industry, we could see retail sales up to eleven billion by 2020.
Challenges Facing the Industry
The opportunities in the cannabis industry are apparent. However, there are also considerable hurdles as well.
One of the biggest challenges facing businesses is cannabis’ current status as a Schedule I substance in the United States. This label means that all activities in the cannabis industry are still federally illegal.
This has presented enormous hurdles for businesses. Banking is still a huge challenge for cannabis companies along with taxes. While more banking sources are available for cannabis companies than before, it is still risky terrain.
Many companies still struggle to find secure banking sources. No movements towards improvements in banking have been made on a federal level. This makes running even basic business operations much more difficult for cannabis companies
In addition, we’ve also witnessed considerable delays in the development of new markets. Take Maryland’s medical marijuana program or Massachusetts’s adult-use cannabis program for example. Both programs were anticipated to be up and running far sooner than anticipated. Meanwhile, even in adult-use cannabis states such as Oregon, there have been numerous testing issues. This is primarily due to a lack of education.
Businesses in Oregon faced excessive and nearly impossible regulations imposed by lawmakers who knew nothing about the science of cannabis. This has led to massive confusion and further uncertainty in the industry. And Oregon is far from alone in these issues.
Meanwhile, cannabis businesses are still being booted left and right on Facebook and Instagram. These shutdowns have occurred across industry sectors. From testing labs, product companies, to edibles and even ancillary businesses. A social media account shut down is devastating to a business, especially in the cannabis industry where advertising restrictions are already rampant.
These are just a few of the many challenges cannabis businesses are facing in the current market. While some proponents argue that descheduling could alleviate some of these issues, others argue it could open a bag of worms. After all, if the DOJ were to deschedule cannabis, it could leave the industry in the hands of big pharma.
Needless to say, there are numerous challenges ahead of us as the cannabis industry emerges from the shadows and into the light.
The Trump Impact
What will happen to the cannabis industry under the Trump administration?
Truth be told, no one really knows for sure. We do not have any idea where President Trump really stands on cannabis. This has, of course, led to a lot of unpredictability in the industry, from all sides. While Jeff Sessions has taken a strong stance against the industry, Trump has yet to take a stand.
Chris Walsh, during his speech at the Emerald Conference, broke down five main scenarios that could occur under President Trump.
What will actually happen? Time will tell. However, the cannabis community must continue to stay vigilant in monitoring these changes in the meantime.
What to Watch Going Forward
It is both an exciting and challenging time for the cannabis industry.
Incredible innovations will continue to take place in the coming years. Who knows where this industry will be in the next five to ten years. It is the birth of a brand-new industry.
However, professionals, patients, and investors alike must prioritize monitoring the political landscape. Changes may occur overnight, on federal or local levels. Therefore, it is crucial to stay up to date on regulatory changes.
The industry is far from stable. What may work today may not be the case next quarter or even next week. Operating in this space requires flexibility and patience.
However, despite these challenges, it is an exciting time in the cannabis world. At no other point in history over the last fifty years has the legalization of cannabis looked so promising. Education will be key to moving forward in this space effectively.
You can watch Chris Walsh’s full presentation and 30+ cannabis science experts from the Emerald Conference right now.
Do you think Trump will crackdown on the cannabis industry?