As the state of the legal cannabis market continues to mature, sales will keep increasing. Competition is growing too and companies are diversifying their product lines to meet the rising demand. At the same time, oversupply and the cost of operating in a highly regulated industry took a toll in 2019 and the naïve exhilaration of the early days has developed into a more pragmatic approach by many of the players in the industry.
With more states legalizing medicinal and recreational use of cannabis, the muddy waters are slowly starting to clear. The cannabis industry is adopting a more sustainable and reliable approach that will help to establish its legitimacy.
Legislative action will keep forging ahead
Despite ongoing federal prohibition, it is obvious that the legalization of cannabis is an important issue in the U.S. Marijuana Moment states that 975 cannabis-related bills will be moving through Congress and state legislatures during 2020 sessions. Regulatory actions will continue on both the federal and state level.
States are learning from the experiences of others when developing their laws and ongoing legalization and decriminalization continues to fuel growth. Cannabis is currently legal for medical use in 33 states and by the end of 2020, that number will rise.
There are some predictions that medical cannabis will be legalized federally by 2021. The fastest and most likely way for full legalization and decriminalization of cannabis to occur would be to elect a president that supported this.
The CBD market will begin to mature
CBD is growing in popularity and being added to a vast range of products, from makeup to food. This is likely to continue in 2020 with CBD being added to even more products such as nasal sprays, deodorant, and hand soaps.
With little legal oversight, consumers often don’t know how much CBD products contain and how effective they are. This is likely to change in 2020 due to customer demand for proper standards.
We’re likely to see CBD brands that don’t provide the necessary information or provide false information about potency and ingredients used in products being removed from the shelves. New regulations might cause the market to become less saturated and give more room to legitimate brands.
Real medical testing will increase
As cannabis becomes legalized, reliable analytical testing is necessary to ensure the safety of consumers. Different states have different testing requirements but most of them require testing for the potency of CBD and THC as well as contaminants such as heavy metals, residual solvents, pesticides, and microbes.
Many testing laboratories have been operating without guidance from established agencies and there is little cross-validation among labs who have all developed their own proprietary methods. Standardized methods for cannabis analysis need to be established.
The cannabis testing industry is maturing rapidly, however, and many certified testing labs are now offering reliable quantitative data. Testing requirements are increasing and laboratories are under scrutiny.
More science-driven randomized clinical studies
Despite the widespread use of medical cannabis, there’s still much that’s not known about its therapeutic effects. More science-driven randomized clinical studies are necessary to support anecdotal medical claims. Companies want to use better data that comes from well-designed clinical trials.
Getting federal approval to study cannabis is still difficult due to its illegal status, and researchers are limited in what types of cannabis they are allowed to study. Another big challenge is the lack of funding. Many private donors are funding research. For example, American corporations are giving research grants to Israeli scientists as Israel is a world leader in cannabis research.
With a countrywide move away from stigma-based prohibition to science-based regulation, more resources are likely to be allocated toward understanding the therapeutic potential of cannabis. In the future, we’re likely to understand far more about the benefits of certain dosages, different strains, and much more.
A big shakedown is coming
It is expensive to run a cannabis business, especially when it is run across states, all with their own rules. Multi-state operators that lack access to traditional sources of capital have a real challenge on their hands and some of them could go out of business in the year to come.
Cannabis businesses obviously want to be viable and profitable. This may mean making hard decisions such as shifting from a focus on growth at all costs. More stable, sustainable businesses will result in a better experience all round. The focus needs to be on strong business practices and good quality products. This includes pre roll packaging and pre roll tubes for weed.
Innovations will keep happening
Innovations will continue, from varying strain types to the creation of new delivery methods that enhance efficacy. One of the problems with edibles is that they take a long time to take effect. This year there’s likely to be more interest in edibles that take effect quickly for people who don’t want to vape or smoke.
Companies are also focusing more on “bio-availability,” which means lower dose products that offer similar benefits to higher dose ones but with fewer side effects.
Using insightful data on customers’ buying habits, dispensaries will begin focusing on personalized purchasing. Customers will be able to receive discounts on products they buy frequently and much more. More operators mean customers have more choices about where to shop and retailers have to find ways to stand out in an increasingly competitive environment.
A final word
The murky waters of the early days of the cannabis industry are slowly starting to clear as more states legalize the medicinal and recreational use of cannabis.
Last year was a turbulent and volatile one for the cannabis industry with oversupply and other factors causing some bumps in the road. However, for those taking the long view, prospects for the years to come look good as the industry matures.
Increased scale and competition will increase quality while lowering costs, leading to improved consumer experiences. Innovation will continue and the use of cannabis will increasingly become normalized. Cannabis companies that execute well on their business plans could be looking at a big year in 2020.