The marijuana industry is gradually seeing an increase in its market cap within the U.S. However, the legalization issue still plagues it and there’s very less hope of things changing drastically. Since 2019, dozens of bills have been submitted to Congress for consideration to fully legalize this market. It was not until late 2020 and 2021 that some real changes were made to make this industry grow. What does 2022 have in store? There are multiple key changes taking place in state marijuana markets.
Louisiana getting its foot in the market
Louisiana missed out greatly on the marijuana market due to conservatives that voiced concerns over the full legalization of this substance. Things didn’t go as expected because a large illicit cannabis industry ensued in the state of Louisiana. The illicit cannabis market was caused due to the publicization of the medical benefits of marijuana.
To have a part in the revenue and taxes, this state has recently established a legal marijuana market for medical purposes. In 2022, the first medical weed flower was sold in this state but some challenges are driving users to the illicit market. Long waiting lines to get medical marijuana might be taking Louisiana back but hopefully, full legalization might be pending to remove bottlenecks that are growing the illegal market.
Oregon scales up its cannabis retail
One state that is removing bottlenecks in its cannabis market for a larger marijuana economy is Oregon. Instead of imposing more restrictions like Colorado, this state has opted to make buying marijuana easier. Colorado imposed restrictions regarding the amount of cannabis you can buy. In stark contrast, Oregon made this restriction more relaxed.
In this state, the cannabis purchase limit has been expanded, which will have a direct impact on increasing revenue. Some marijuana market news has also revealed that Oregon will be allowing home deliveries of cannabis. This might open up a more comfortable marijuana e-commerce market, opening up retailing opportunities to other newer players.
New Mexico jumps for recreational consumption
New Mexico took the bold decision to allow the recreational consumption of marijuana. Taking this step offers retailers within the state more freedom on selling marijuana since no prescriptions or cards will be required to make a sale. The regulatory boards are also preparing to remove license caps in this market, providing smaller operators an entry point to the marijuana trade.
Getting a retail permit in New Mexico will be much easier, resulting in large MSOs competing with the smaller new players in the market. The best part of this full legalization is that it covers all municipalities across the state, unlike California. Investors are looking forward to seeing how this development unravels new opportunities in New Mexico.
Increase in Montana’s marijuana revenue
Montana has reported significant revenue growth within its state in a very short period. Revenue reaching $1.5 million was quite a landmark and it happened only in the 2021-22 New Year’s weekend. It really marked a new trend in the cannabis market. This could be crucial data that affect marketing efforts as well as supply chain readiness.
The huge increase in Montana’s marijuana revenue was revealed by the Montana Depart of Revenue on KTVH. For some, this revenue increase was not as surprising since there are already 380 retailers across the state. The retailers are trading in both medical cannabis as well as recreational marijuana. Hopefully, Montana’s revenue growth could be a testament to other states on the success of full legalization of marijuana.
Increase in states legalizing marijuana probes federal legalization
Although the cannabis industry seems pretty new in the U.S, 20 states have already fully legalized marijuana. Others are pending legalization, while some are facing difficulties with some municipalities. There is also a heightened interest in seeing how this industry fares, especially after it has made its way to the stock market. Perhaps more states might join in, which could force federal legalization somewhere down the line.
Federal legalization could make the trade of marijuana free and promote interstate retail. Needless to say, more revenue and tax gains could be derived from federal legalization. That could take a while before it happens since it could require a united front on all states.
Impact of these state adjustments on the overall market
Recreational marijuana consumption legalization opens up a vast expanse of opportunities in the overall market. The range of marijuana products will certainly increase with newer items being added. For example, cannabis-infused energy drinks, alcoholic ciders and so much more will be available. Users will also demand interesting products since their taste in cannabis will evolve.
As a result, more craft cannabis efforts could be realized in 2022 and beyond. Interested users will most likely grow in number since some might prefer alternative cannabis products apart from marijuana flowers. Therefore, the overall market will significantly grow as more users join recreational cannabis and their demands continue to increase.
Scaling strategies in place for MSOs
Multi-State Operators have owned the cannabis industry since larger corporations could meet the strict regulations and afford permits. With eased restrictions, MSOs might be threatened by smaller players with dynamic ideas and direct access to markets. To prevent losing their widespread footprint, MSOs could consider mergers and acquisitions as their scaling strategy.
Merging and acquiring the smaller companies entering this market will make MSOs sustainable. This move could also create a positive ecosystem where smaller businesses get access to larger markets with niche product ranges. Only time will tell how MSO will merge and acquire smaller retailers but it seems like the best option for the market.
The bottom line
2022 kicked off on a good note in the marijuana retail sector. The changes, and developments adopted by states, could lead to federal legalization down the line. In the meantime, states that approved recreational consumption of marijuana has seen major revenue and tax income improvements. Montana is a prime example, and hopefully, other states might follow suit soon.
