Cannabis is an industry emerging even stronger from Covid
By Alicia Wallace, CNN Business
When members of the cannabis industry descended on Las Vegas last week for the industry’s largest trade show, there was something moving in the air. It wasn’t the aroma of a freshly lit joint, but rather the feeling that everything seems to be turning rosy for the industry.
Despite a global pandemic, disrupted supply chains, soaring inflation and an ongoing struggle to legalize marijuana at the federal level, the cannabis industry in America is flourishing.
Sales reached $ 20 billion in 2020, are expected to exceed $ 26 billion this year, and are expected to grow to $ 45.9 billion in 2025, according to data from Marijuana Business Daily. which were shared at MJBizCon, the industry’s annual trade show. The nearly 46 billion dollars in turnover would make the cannabis industry bigger than the craft beer industry, said Chris Walsh, CEO and Chairman of MJBizDaily.
âThese are potentially conservative numbers with what we’re seeing unfolding,â Walsh said as the three-day event kicked off.
Snowball sales in the United States should come as no surprise. At this point, the majority of Americans live in a state where some form of cannabis is legal. More than two-thirds of U.S. states have legalized medical cannabis, 18 of which have legalized recreational cannabis, according to the National Conference of State Legislatures.
Indeed, the cannabis industry has received a boost in the pandemic era from consumers overflowing with stimulus money, people forced to stay home with little to do, and dispensaries in some. States considered to be essential businesses. Many states, including pioneers like Colorado, had record sales in 2020.
Corn the past 12 to 18 months shows there’s more to history than a Covid bump, Walsh said. Sales continue to accelerate at a record pace in US markets, especially in established states such as Colorado, Washington and Oregon, Walsh said.
âYou see the next phase of a maturing industry taking hold here,â Walsh told CNN Business.
It wasn’t that long ago that quarter billion dollar transactions were rare in this industry. Now they follow each other quickly: the latest being e-commerce and tech company Dutchie, which this month raised $ 350 million in its last round of investors.
The industry is also growing rapidly and creating jobs, said Karson Humiston, CEO and founder of Vangst, which runs a job recruiting site focused on the cannabis industry.
It is estimated that there were 321,000 full-time jobs in the cannabis industry in 2020, up from 234,700 the previous year, according to a report released earlier this year by Leafly and Whitney Economics.
âTake a look around,â Humiston said, pointing to the bustling crowds in the showroom. “People want to get out of their dying old industry and they want to get into cannabis. That’s it. Now is the time to get involved, because it will never be so small again. “
Yet many challenges and uncertainties persist.
The United States Food and Drug Administration has yet to provide official guidance on how cannabinoids derived from hemp, such as CBD, can be included in commercial products; California, the country’s largest cannabis market, continues to see its sales siphoned off to a large unregulated industry; the industry has become less diversified over the past two years; and programs to address aspects, such as social equity or redressing the damage caused by the war on drugs, are still in their infancy.
On Capitol Hill, rumors of federal marijuana reform and legalization have become a clamor. But lack of consensus among lawmakers and members of the industry, change is not on the immediate horizon, Walsh said.
Some want incremental but necessary measures, such as banking and tax reform. Others hope to tackle legalization all at once with comprehensive legislation.
âI still doubt that we will see any significant federal reform next yearâ¦ including in the banking sector,â Walsh told CNN Business, referring to long-standing efforts to change federal law to allow businesses of legal cannabis (and those who serve them) access to traditional banking services.
Because marijuana is considered a Schedule I substance, some financial institutions have been reluctant to serve the industry, leaving operators unable to secure small business loans, pandemic relief, insurance and disaster relief. Operators rinse with species present significant security concerns, such as theft, burglaries, assaults and even murders, supporters of the bill said.
The waiting game is nothing new to the cannabis industry. Even though he has grown and spread by leaps and bounds, its legal advancements have come in inches.
âI agree it’s a daunting task to see federal legalization, but what we’re putting on the table is inevitability,â Steven Hawkins, executive director of the Marijuana Policy Project, said during an MJBizCon panel on the federal legalization. âWhen you get to the point where half the country has legalized adult use, we’ve now set the stage for inevitability. And that is starting to change the tone and tenor in Washington.
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