Cannabis cultivation, retailing, and consumption have been very fluid subjects nationally, with different states having differing opinions. Despite these legalization challenges, this industry grew like a weed through a concrete crack and gained much favor. Undoubtedly, this industry has taken great strides to be well-established as it is now, but it still has a long way to go. What can you expect from the cannabis industry during 2022?
- Internet of Things integration
Amongst the top cannabis trends, technological advancements are making a home run. The implementation of the Internet of Things into cannabis retail and consumption solves critical problems such as accurate dosing and others.
Currently, technology that helps cannabis users test the potency of the product they are consuming is being piloted. Advancements such as these eliminate the guesswork and promote safe consumption, which could attract a more conservative audience to cannabis use. This is certainly the beginning of other useful IoT tech that will improve the cannabis industry.
- More legislative bills being pushed
Legislation has been the albatross around this industry’s neck and in 2022, there might be some headway with the bills being pushed by Congress. For example, the Cannabis Administration and Opportunity Act could break down the trade borders of marijuana within the U.S.
Although there is no certainty that this bill will be passed, this indicates that Congress is looking into making the cannabis industry less restricted. The best part is that this might not be a one-sided war, but both parties have shown an interest in decriminalizing marijuana.
- Dedicated spaces for cannabis consumption
Public consumption of cannabis is currently prohibited in most states. In 2022, this will be a thing of the past since some states are finalizing plans to dedicate certain public spaces for cannabis consumption.
These dedicated consumption spaces will bring significant growth in the cannabis industry since there could be a surge in marijuana sales for social events in those areas. Nevada has approved the establishment of cannabis consumption spaces aptly called “consumption lounges.” The first of these lounges will be seen in Las Vegas in mid-2022.
- Vertical expansion
The latest cannabis industry news had rumors of edibles permeating into the food and wine industry. This could mean that during 2022, edibles might be available at retail stores. Cannabis energy drinks and alcohol are definitely going to increase in distribution since, in some states, they will be available in normal liquor stores.
A vertical expansion of this magnitude might attract a different crowd that does not prefer smoking cannabis. The byproduct thereof is higher sales margins and an increase in marijuana supply.
- Medical research diversification
When the medical marijuana market was established and legalized, minimal research went into it. Cannabis was regarded as a holistic auxiliary treatment method for various ailments.
In 2022, this will change since more detailed research has been probed into the medical applications of cannabis. The preliminary research has indicated that marijuana can even work as an antibiotic. These findings could lead to topical antibiotic creams or other forms of treatment for infections.
- Potential tax reduction
There are ongoing discussions about the IRS Code 280E, which prevents companies engaged in the cannabis trade from deducting some business expenses from their federal taxes. Additionally, companies in Alaska and California are voicing their concerns over the excessive tax for cultivating and trading marijuana.
For example, in Alaska, there is a flat $800 fee to cultivate cannabis, which directly impacts the profitability of cultivators. Companies are contending with these high taxes and the fight might get bigger during 2022.
- Attracting more investment
The cannabis industry has proven to be recession-proof, especially during 2021, which caught the eyes of major investors. Some cannabis companies have listed their stocks on the stock exchange and they have been performing really well.
Some celebrities are also gradually investing more in the cannabis industry and this might be raising awareness for others as well. Since more states might be legalized, that has been identified by some investors as a significant growth opportunity.
- Increase in indoor cultivation
Global warming and its direct and indirect factors directly impact outdoor marijuana cultivation. With unpredictable weather, harsher winters, and exceedingly hot summers, the quality of the crop deteriorates. There is only one way to maintain the quality of the marijuana supply, and that is using greenhouses and indoor cultivation facilities.
Companies at greater risk of losing revenue due to global warming have invested in large growing facilities. The side benefit of this type of cultivation is that it is easy to cross-breed different cannabis strains.
- SAFE Banking
Businesses in the cannabis trade have found it hard to set up business bank accounts due to the former landscape of this industry. Not having a business bank account makes bookkeeping harder and the company operations are impacted by this. However, in 2022, things might change with the Safe And Fair Enforcement (SAFE) Banking Act.
This bill has been considered by Congress before but did not get the votes it needed. It is returning and might change the way banks do business with companies involved in the marijuana trade.
- Potential social equity in the cannabis industry
Social equity in the cultivation and trade of cannabis is one of the forefront concerns impacting widespread legalization. For example, in Illinois, there are a lot of lawsuits regarding making this industry fair and equitable to all parties.
The industry is gearing towards sharing equity with those impacted by the war on drugs the most. This could carry a lot of weight when legalization is being considered in other states.
The cannabis industry landscape has changed significantly and more changes are being expected in the coming years. These 2022 trends are just setting the platform to make this sector more profitable and sustainable. Also, the implementation of the latest tech advancements will take the cannabis trade to greater heights.