Friday, December 8, 2023

The Biggest Challenges The Cannabis Industry Will Face In 2021 And Beyond

There are many obstacles still ahead for cannabis businesses, brands, and consumers in the U.S. and abroad. Still, it’s safe to say that the industry will continue to boom for the time being.

By Tia Moskalenko

No matter where you live in the United States, it’s safe to say that the cannabis industry has come a long way in the past couple of decades.

Back toward the beginning of the New Millennium, if I had told you that recreational cannabis would be legal in 18 states and that medical marijuana would be permitted in 37 states, you would have most likely laughed in my face and told me to take a hike. If you were a cop back then, you might have even had me arrested and charged with possession.

cannabis sales
Photo by Michele Ursi/Getty Images

But all jokes aside, today, marijuana is, in fact, legal in many U.S. states for both medicinal and recreational uses, as well as in other countries, such as Canada, South Africa, the Netherlands, and more!

But despite this widespread legalization of cannabis in both the U.S. and abroad, the industry still has a long road ahead of itself in terms of establishing itself as the titan that it might truly become.

What changes, trends, and challenges should we expect to see in the coming years?

Especially as news laws and regulations are continuously developing that affect consumer buying habits and the overall sales and profitability of owning a business in the cannabis industry today.

In the following article, we’re exploring some of the biggest challenges that experts predict will dominate the cannabis industry in 2021 and beyond.

Industry Predictions For Big Cannabis In 2021

As the cannabis industry continues to develop, the industry is only expected to grow and see much strength in the coming years, with experts predicting that market values could reach $30 billion by 2025.

In legalized states and jurisdictions worldwide where pot has been deemed legal, laws surrounding the production, distribution, and sale of wholesale cannabis will continue to dominate the news.

However, before we see the markets stabilize, we should still expect to see a lot of volatility in industry-level laws and regulations, especially within jurisdictions such as the U.S., where different states have different rules regarding cannabis. Yet, it is still considered illegal at the federal level.

With this paradox, cannabis companies should expect a lot of change in the coming years regarding regulations.

cannabis insurance money
Photo by Yarygin/Getty Images

Startup funding, cannabis finance, and banking will continue to be ongoing concerns for countless smaller businesses in the industry, especially as cannabis awareness continues to rise and the industry establishes itself as an “addictions” industry, right along with the tobacco and alcohol industries.

But even with these challenges ahead, experts believe the overall outlook of the cannabis industry remains sound and that investors, businesses, and consumers alike should only expect to see more signs of strength in the future.

The Importance Of Controlling The Cannabis Industry

Many pot advocates would have you believe that the government should not be involved in their or anyone else’s marijuana use. They might even have you believe that the government is only legalizing it because it wants a cut of the market.

However, the truth is that regulations are crucial to keeping both consumers and cannabis companies safe.

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And today, there are just as many pot advocates that believe that enacting better laws and regulations is the only way to make the industry a safe place for both consumers and cannabis companies to coexist peacefully.

In the US, before cannabis being decriminalized in states such as Washington and Colorado, there were very few, if any, laws regarding the production, processing, or sale of cannabis and cannabis products.

Today, on the other hand, there are many laws and regulations in place to oversee the sale of cannabis in legalized jurisdictions. And with this, consumers are getting the benefits of access to better, higher-quality cannabis products than ever before and more variety in terms of the cannabis products that are readily available from brands and dispensaries.

Along with this, we also expect that consumers will develop an increased awareness surrounding marijuana and cannabis-related products.

This increased awareness will eventually lead to pot brands and companies being required to adapt to changing consumer behaviours, resulting in economic boosts to other sub-industries, such as manufacturing, distribution, marketing and advertising, eCommerce, and many more that will rush in to cash in on mergers with the booming cannabis industry.

Boosting The Economy With Pot

There’s also much good to be said about regulating the industry when you consider that tax profits and proceeds for cannabis sales are single-handedly helping boost local, national, and global economies.

In the U.S. alone, just in the past couple of years since legalization, states like Washington and Colorado have seen better sales than predicted, resulting in rather handsome tax revenues being generated.

RELATED: Increased Demand For Top Talent As Cannabis Industry Salaries Continue To Surge

In Colorado, the state collected more than $302 million in fees and taxes from marijuana sales in 2019. That same year, experts estimated sales in the entire continental U.S. at roughly $12.2 billion.

What’s more is that, beyond 2021, cannabis sales in the U.S. are expected to reach up to $31.1 billion by the end of 2024 and into 2025.

Terpene Flavor Guide: Where Cannabis Gets Its Taste
Photo by Elsa Olofsson via Unsplash

For countries such as the U.S., the cannabis industry is poised to become a sector that can help the national economy recover from the uncertain economic conditions left in the wake of the COVID-19 pandemic.

In fact, according to New Frontier, the cannabis company suggests that federally legal pot could generate more than a million jobs and an additional $105.6 billion in aggregate federal tax revenue by 2025.

But even with such impressive predictions for the future, there’s still a lot of work to be done for the cannabis industry as a whole.

The Challenges Ahead For Cannabis Brands

Whether farmer, wholesaler, retailer, consumer, lover, or hater, the laws and regulations that continue to shape the industry will affect everyone.

As a growing number of states and international jurisdictions develop their industries, businesses should expect to see changing regulations surrounding the import and export of cannabis products, resulting in potential price fluctuations at an industry level.

RELATED: Which Market Leaders Will Make Up The Cannabis Industry Space Race?

Consumers should expect to see fluctuating cannabis prices. But in general, countries such as Canada have seen an overall decline in cannabis prices since it first legalized pot back in 2018.

We also believe that the ongoing development of the cannabis industry will continue to see an increase in business mergers and acquisitions with businesses from other sectors, such as the alcohol, tobacco, food and beverage industries.

For instance, it wouldn’t be all that unexpected to see restaurants or other establishments serving cannabis products in the future, much in the same way beer, wine, and different kinds of alcohol are served.

All of this will likely add to both the volatility and strength of the industry in the future.

Pennsylvania Is Crushing It In Cannabis
Photo by anankkml/Getty Images

In the end, the main challenges the industry should expect to see in 2021 will focus on laws and regulations surrounding the production, distribution, and sale of cannabis, as well as laws and regulations surrounding business funding and financing of cannabis-related businesses.

But despite the possibility of fluctuating prices and all of the regulatory challenges ahead, industry observers should expect to see nothing but better production, better sales, more revenue, and safer products for consumers in the coming years.

The Future Of The Cannabis Industry

As every day goes by, thousands of cannabis activists worldwide continue to lobby for reform and new rules and regulations that will make the industry safer and more accessible to everyone, including consumers and cannabis companies alike.

Overall, we believe that the industry will remain strong, seeing consistent growth throughout 2021, 2022, and beyond. But there are many obstacles still ahead for cannabis businesses, brands, and consumers in the U.S. and abroad. Still, it’s safe to say that the cannabis industry remains healthy and will continue to boom for the time being.

This article originally appeared on Benzinga and has been reposted with permission.


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