When most people discuss the recreational cannabis trade, much of the focus is on how exciting it is that the industry is growing at such a fast pace. But that’s just one side of the coin.
Given the sales numbers marijuana has posted over the course of the past year, it’s hard to imagine that there were any obstacles at all to overcome. The cannabis industry was a force to be reckoned with during both 2020 and 2021. In fact, the legal cannabis market as a whole is expected to be worth $70 Billion as a whole by the year 2028.
Even though the nascent industry has lofty goals, they won’t be reached without overcoming some hurdles. Here are some of the biggest ones it faces in 2022.
Market Volatility as New Players Continue to Enter the Industry
Given the amount of new markets that have legalized cannabis in recent years, it’s no surprise that the space is getting more crowded. Entrepreneurs everywhere have recognized the lucrative opportunities at hand when it comes to the cannabis industry. In the second half of 2021 alone, investment in cannabis experienced an 85% spike.
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Since the word is out on the potential revenue that can be made from investments within the cannabis industry, it’s only natural for new entities to eventually enter the fray. As new investors get involved, it’s likely that they may have inaccurate expectations on when they’d be able to yield returns. Those inaccurate expectations for quick returns, along with a lack of regulatory measures ensure that the volatility that currently exists within the cannabis industry will continue to serve as an obstacle going into 2022.
More Competition From Brands Producing Synthetic Cannabinoids
Another obstacle for the cannabis industry to overcome during the year 2022 is an influx in competition from producers of Delta-8, Delta-10 and THC-O products.
One of the biggest reasons the synthetic cannabinoid market serves as a threat to the recreational marijuana industry is because of the fact that lots of states allow for the online sales of these sorts of products. The fact that synthetic cannabinoids can be easily ordered just like any other consumer good means it’s easier to access for most consumers than recreational cannabis products. This could provide a level of competition throughout 2022 that the recreational cannabis industry may or may not be prepared to combat.
Determining What Consumers Expect From Cannabis Brands
In most consumer industries, getting to the gist of customer sentiment is as simple as sending an online survey. But since the vast majority of transactions in the cannabis industry are in person and cash based, it’s hard to get an idea of what customers would change about their experience with a cannabis brand. Still, recreational cannabis brands have the task of staying ahead of the curve when it comes to satisfying customer needs. The cannabis brands that are able to figure out how to do that effectively will be well-positioned to advance ahead of the competition.
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Since recreational cannabis sales are still federally illegal, keeping in contact with customers in order to gauge their satisfaction levels is difficult. Without P.O.S systems, keeping customer details on hand is nearly impossible, but by getting creative cannabis entrepreneurs should be able to find other innovative ways to tap into the heart of customer sentiment.
When most people discuss the recreational cannabis trade, much of the focus is on how exciting it is that the industry is growing at such a fast pace. Unfortunately, that’s just one side of the coin. The challenges it faces are clear, and they won’t be easy to overcome. However, 2022 still aims to be one of the most exciting years yet for the young, blossoming industry.