One of the most exponentially growing industries in the world is seeing a major paradigm shift in its growth! Read on to find out what the next big things in the cannabis industry are!
The cannabis industry is growing at an alarming rate. With its almost legal status in many parts of the developing world prominent business owners are looking to invest in it. With the stigma around it easing and the plants medicinal benefits surfacing and break new grounds on a daily basis, professionals are looking to develop their careers in the cannabis industry. With the hike in interest, higher education programs and trainings have been devised in universities and by independent bodies to train professionals on how to grow, cultivate, research and sell the plan in the best way.
It would not be wrong to say that this industry is growing at a mind boggling rate and major market players are beginning to take notice and invest stakes in it. By one estimate, with the global sanctions on the drug relaxing, the cannabis industry will reach over $146 billion by the year 2025.
This means only one thing: with most of the industries looking to stay relevant, the cannabis industry despite its magnificent growth is in its nascent stages of benefitting those who have invested in it. That is the level of boom business gurus are predicting for this industry. There are simple reasons for this. The stigma attached to the drug is slowly getting diluted, people no longer associate it as a worthless drug used by hippies, with the legalisation the consumer of cannabis has become a mainstream individual who most likely has a job and flourishing career. The medicinal benefits of the plant are dime a dozen, with the discoveries being made about its magical healing properties the medical world is going gaga over what more they can extract from it.
The mainstreaming of the drug legally has helped students chose it as a career path which will not be looked down upon in anyway. It is a whole industry which despite its already huge market has yet to reach maturity. It is amidst growth and if laws stay in favour, this industry might just become the biggest economy raising factors for developed and developing nations.
With growth there come many challenges and with scale and mainstreaming, the cannabis industry is set to embark on an interesting journey. One thing is for sure, in the near future, it can be claimed that the cannabis industry is in for an exciting ride and those investing in it right now will reap great benefits later.
Product Evolution: Cannabis products are going to evolve immensely over the course of the next five years. While packaging and design cues are there for specific cannabis brands, there hasn’t really been a breakthrough in a cannabis brand creating its individual identity and establishing itself as a market leader. The growers are so invested in experimenting with the different kinds of cultivating they can partake in that the brand development and identity creation just hasn’t happened for them yet. This is an exciting time where once the cultivation and growth dynamics are settled and more marketers specialize in the cannabis field, there will be a rise in branding and selling more in the cannabis industry. Which means that the next five years will see a rise in more brands being presented and sold off the shelf to consumers.
Agricultural Growth and Sustainability: Many business leaders hope that the cannabis industry will become a true bastion of sustainable business practices in the global transition towards a circular economy. Since the industry is in relatively nascent stages, it can also include sustainable practices from the beginning to ensure a healthier planet which will in return help them harvest and grow more. Trainings on growing and breeding more variations have been on the rise in many regions and if legalisation continues in the way that it is going on at the moment, it can be said that the cannabis industry will provide the best agricultural growth for many countries.
Users and Consumption in Retail: One of the biggest reason for the rise of this industry at the exponential rate is that 66% of its users globally are millennials from the ages of 18-34 and they use it at least once a week. The legal standpoint shift has caused a paradigm shift in the way the drug is perceived. 74% of the population of places where the drug has been legal believe that it is safer than alcohol. 46% people prefer smoking the drug rather than consuming alcohol. This gives rise to the biggest question, in the next five years can we suggest that there might be major hurdles in the so called war on drugs? With drugs getting legalized the biggest blow is to the alcohol industry. The next five years will see this rivalry strengthen and perhaps be fought on legal grounds. However one thing is for sure, the rising adoption rates of cannabis and switches from alcohol coupled with the frequency of use suggest the potential of a retail market for cannabis and its ability to topple and disrupt the exist market completely.
An example of this disruption is best explained through Canada’s recent nationwide legalisation of cannabis. Cannabis dispensaries outsold the largest organic food sold, Whole Foods. People rushed to take the drug off of the shelves. It was alarming and assures of one thing, the Green Rush is a real phenomenon and it is best to get on this train to stay relevant rather than resisting it. Retail cannabis is waiting to be the next big thing in countries that chose to adopt it through making it legal. With more opportunities and greater demand there will start to be innovation in ways through which the drug is consumed. With trends such as micro dosing already around, inhalables, edibles and topicals will all be sold off the shelves to make sure the consumer keeps coming back for more. While the sanctions and compliance standards are still very high for the industry, it provides more space for start-up owners to come up with creative ideas to adhere to them and yet make sales.
Literati Interest In the Cannabis Industry: Another extremely aspect which is often ignored when cannabis industry growth and potential is often ignored is the sudden interest of the literati of society in the industry. With major universities in America offering four year degrees in the management, business development and finance to manage and understand the industry- you can be sure of one thing, it is an industry which is here to stay. With trainings being offered to understand the usage of the drug the sudden hike in educationists in the cannabis industry has been long coming. With the industry growing at such a fast rate, the best universities in the world see the potential of helping create graduates who will gain success by becoming front runners and decision makers in the market. Students are option to study these degrees and enrol in them to make it their calling. The attitudinal shift can be credited to the legalisation of cannabis.
LawMakers, Brand Owners, Consumers: Lawmakers will play an extremely important role in the future of the industry. With the ongoing battle between the alcohol industry and drug industry, the restrictions imposed by lawmakers on cultivation and selling will set the tone for the future sanctions. Money coming into the industry will evidently be affected by the strict sanctions that business owners will need to comply too.
Brand owners are also trying to change the narrative around the drug and how it was perceived before. Even though there hasn’t been a particular breakthrough yet and most of the mainstreaming is thanks to the legalisation there is space for growth. The idea is to make cannabis consumption a part of a person’s routine and remove all memory of it as a street drug. It needs to be repositioned in the minds of the people for sales to rise and grow. Branding and ensuring a total change of image is something which be on the rise in the next five years!
Like any other industry the cannabis industry will also undergo segmentation, there will be the creation of three potential aesthetics:
- premium/luxury which will pick it’s up design cues from high fashion and taps into exclusivity to make the consumer feel truly special and appease the status quo
- premium/artisanal which defines a more wholesome feel espousing the benefits of natural, grown-not-made produce, this will have the right amount of customization and commercialization
- Premium/medicinal which frames the product as a viable alternative to traditional medicines and a responsible life style choice.
But at the end of it all, one thing will remain constant in the rapidly growing industry, the consumer will remain the king. Consumers will continue to push, pull and change the dynamics of the cannabis space. Inherently the cannabis consumer is a being that needs to feel connect with the brands available in the market. In addition, brands that provide extra added benefits such as being sustainable and plastic resistant will win the hearts and minds of this socially responsible millennial mindset. The industry needs to keep abreast with the changing trends and act where the trend feels relevant to them. The tech sector will also play an important role in the revolution of the cannabis industry in the next five years.
Banking: Banking will also play a crucial role in the evolution of the industry in the next 5 years. Whenever an industry has seen the epitome in its evolution cycle, banks have played a pivotal role and the cannabis industry is no different. As of now the cannabis industry is seen as high risk making it almost impossible to raise capital. Mostly cannabis manufacturers have to pay for all their packaging upfront and banks mostly hesitate from offering any kind of relaxation of credit. Design studios also steer clear on many cannabis brands as they fear backlash from banks in terms of borrowing. This is one of the major reasons why many large corporations which are heavily reliant on banks, have not entered the cannabis industry yet.
In countries where legalisation has been done nationwide the situation is different, there banks are part of the equation and the growth in the industry shows in numbers.
The overall growth is heavily reliant on the money coming in from different sources. There is demand- that has been established. How to meet that demand and create a quality product which will resonate with the extremely picky consumer is what cannabis companies will have to navigate. It will be very interesting to see the rise of this industry. What makes it even more special is how far it has come in such little time.
Overall, it wouldn’t be wrong to say that the next five years in the cannabis industry will be a lot like puberty—not quite an adult, but no longer a child. It’s growing and how! And as with all maturing markets, the winners will be sorted from the losers and the winners will be those who do the right thing at the right time. There has never been a market more ready for innovation and creativity and a burst of that will really put the gears on the markets steady growth!
Business gurus and country economies are tuned in to make sure they don’t miss a beat to join in and grow with the cannabis industry. As of now the market is ripe and welcoming of new players. There are jobs to be created, innovations to be done and crafts to be mastered. There will be growth. A lot of growth and then there will the race to survive, that survival will be done by those who make sure their product is amazing and has the right connection with the consumer. The cannabis industry is moving forward and in the right way. It will be interesting to see how this billion-dollar industry evolves more in the next 5 years!