5 Key Innovations Driving the Future of Cannabis
It’s said that necessity is the mother of invention.
As cannabis breaks into the mainstream, the complex web of regulations surrounding the plant may well be what compels the industry to think outside the box.
Today’s infographic from Valens GroWorks highlights some of the most anticipated areas of technology-based disruption in “cannabiz” – the business behind cannabis.
Potential Industry Game-changers
As the cannabis industry grows, the business behind it must grow as well – and to get an edge, industry players are investing in new technologies and innovative practices that could be industry game-changers.
Here are some of the most disruptive moves happening that could shape the future of cannabis:
As consumers become more discerning, they’ve come to demand premium quality cannabis. That’s why many indoor growers are exploring various means to improve the productivity of cannabis plants.
- Cloud-controlled lights
Using cloud-based IoT technology, cultivators can remotely adjust the colors and cycles of growing lights that cannabis plants are exposed to in their operations. Such precise control ensures consistency in plant quality.
- Tissue culture
Essentially, tissue culture is the multiplication of a single cannabis tissue into hundreds of identical ones. While this method is impressive, it’s incredibly tricky to get right at scale.
Biotech breeding is another upcoming trend to watch out for. Just like the ubiquitous GMO foods you can find in a grocery store, the genetic manipulation of cannabis plants to strengthen specific effects could take the industry by storm.
Millions of patients in North America rely on medical cannabis, which will only intensify as states continue to legalize its use. For the longest time, prescribed cannabis has relied on smoking – but extraction technology is introducing new delivery methods.
- Vaporizer Pens
These pocket-sized pens can deliver a controlled cannabis dose, with lower chances of including dangerous chemicals. The latest models include Bluetooth capabilities and smartphone apps to customize vape temperatures, among other features.
- Oils and Tinctures
Cannabis concentrates, packaged into capsules or as liquid, can be used in vape pens or ingested directly. They also provide a small, controlled cannabis dose, and act fast in a patient’s system.
Recreational consumers won’t be left behind. This growing segment is enjoying cannabis-based products in a myriad of ways, made possible by new extraction technologies.
Water soluble oils demonstrate their potent effects quickly through the bloodstream, instead of relying on the slow-acting respiratory or digestive systems.
With a wide range of skincare products in the market, these cannabis-infused lotions can applied to the skin’s surface, where they are absorbed for a relaxing effect.
Despite the increasing legality of “cannabiz”, many businesses and their customers prefer to deal with cash. Financial institutions are also wary of investing in cannabis, as it’s still perceived as risky in certain circles.
To that end, fintech has stepped up to the plate. Secure and automated transactions can be made and processed via the blockchain, potentially creating an anonymous and convenient way for consumers and companies to transact.
Data and Analytics
Cannabis is finally coming out of hiding, but records around point-of-sale transactions are still lacking. Providing context for such data to give it meaning is difficult, but lucrative.
Leveraging big data to track the cannabis supply chain has secondary advantages of easing the regulatory process, and putting customer demand into perspective. What’s more, digital transaction data on these consumers also offers future opportunities for businesses to address their needs.
As the cannabis space steadily progresses, cannabis companies that respond and adapt to these broad trends of tech innovation will be poised for success.
Tech innovation and ongoing R&D are ingredients that the industry needs to continue to mature and grow.
– Michael Garbuz, CannRoyalty Corporate Strategist
The Allure of Craft Cannabis to Investors
Craft products are taking the retail world by storm. Find out why investors should be paying close attention to craft cannabis and its potential impact.
The Investor Appeal in Craft Cannabis
They say if you do what you love, then the money will follow. In the multi-billion dollar cannabis business, that has certainly proved true for those who have been passionate about the plant for decades — otherwise known as craft growers.
Today’s infographic from Pasha Brands dives into the huge consumer demand for craft products, and why investors should pay attention to this trend as it extends into cannabis.
The Perfect Craft Product
Chances are, you may have encountered any of the following at least once: microbrewed beer, specialty coffee, premium wine, or organic food. They’ve become so popular, that craft versions of all these are steadily carving a valuable niche in their original markets.
|U.S. Market Size, 2017||Craft Market Size, 2017||Share of total|
|Beer vs Microbrew Beer||$111B||$26B||23%|
|Coffee vs Specialty Coffee||$32B||$10B||31%|
|Wine vs Premium Wine||$80B||$44.8B||56%|
|Food vs Organic Food||$898B||$49.4B||5.5%|
Whether it’s introducing flavors into brews, slow-roasting beans, producing wine in small lots, or using a conscious “farm to table” label — what they have in common is the careful attention that’s paid to the process from start to end.
Craft cannabis bears a strong resemblance to all of these in that way, as growing it involves extra care, compared to large-scale producers. For example, hand-trimming is more labor intensive than using machines, but results in products with superior quality.
What are some other characteristics of craft cannabis?
- Attention to detail
A hands-on approach allows growers to personally ensure each cannabis plant is healthy.
- Sustainable practices
The use of organic farming to save energy, creating a smaller environmental footprint.
- Social responsibility
Smaller growers typically leverage local connections, creating employment opportunities.
- Artisanal branding
Sophisticated and modern packaging helps appeal to different types of craft cannabis consumers.
It’s clear why consumers care about craft cannabis. But what does it offer investors?
Making the Case for Craft
Investors should be paying close attention to craft cannabis for three key reasons: a higher price point, a focus on quality, and access to the retail market.
Upscale Price Tag
On average, organic cannabis has a higher price point attached to it, compared to regular grade cannabis.
- Industry average: $9.02/ gram
- Organic average: $11.40/ gram
Using organic methods to grow cannabis means that the final product on shelves boast an enhanced potency and effect. Since craft cannabis is also grown organically, it’s clear that consumers are willing to spend more to secure a premium product.
Promise of Quality
It might not come as a surprise that the most famous craft cannabis regions are also where the biggest volume of legal cannabis sales come from. California and Canada accounted for nearly 38% in global market share in 2017:
- Worldwide sales: $9.5 billion
- California sales: $3 billion
- Rest of U.S. sales: $5.5 billion
- Canada sales: $0.6 billion
- Rest of world: $0.4 billion
These two areas have a foothold in cannabis sales, and with recreational legalization unfolding in both – and 75 million people living between the two jurisdictions – it will only continue to grow.
Opening the Doors
Following nation-wide legalization in Canada and an increasing number of states in the U.S., the continent is facing a cannabis shortage. Why? As it turns out, while craft growers are abundant, they still face regulatory hurdles in order to move from the “gray” underground market into launching legal operations.
Craft cannabis could be a cornerstone for industry growth, but its growers have been in the shadows for a long time. As cannabis gains momentum, tapping into the huge network of craft growers will be key for success.
The Hidden Problem Looming Over the Cannabis Edibles Market
The cannabis edibles market is one of the most exciting growth segments for legal sales, but a variety of concerns remain, especially for beverages.
A Problem Looming Over the Cannabis Edibles Market
The boom in legal cannabis has been absolutely historic.
According to ArcView Research, it’s already a multi-billion dollar industry – and by 2022, the legal market could be worth $32 billion globally.
As in any nascent industry, the early days of cannabis have been exciting and formative. As it begins to mature, it’ll become clearer what products will drive future growth.
In this context, cannabis edibles and beverages have taken center stage – and today’s infographic from Trait Biosciences outlines the magnitude of this opportunity, along with some of the challenges the market faces going forward.
The Rise of Edibles
From dark chocolate to CBD-infused beverages, the cannabis edibles market is one of the most diverse and exciting markets for both consumers and businesses.
Edibles and beverages have already more than doubled in their share of the overall cannabis market since 2011, and the market is expected to grow in size from $1 billion to $4.1 billion between the years 2017 and 2022.
This year, the Specialty Food Association even named cannabis edibles and beverages as a “Food Trend of the Year” – a nod to the fact that edibles are going mainstream, even within the scope of the much larger food and beverages industry.
Not surprisingly, as this category emerges, there are many big brands exploring options in the edibles market, including Constellation Brands, Molson Coors, Mondelez, Carl’s Jr, Anheuser Busch, Neal Brothers, and Coca-Cola. In particular, the beverages space seems to be hot: Constellation shelled out $4 billion for a stake in the largest cannabis company globally (Canopy Growth), and beer-maker Anheuser Busch partnered with Tilray to research THC and CBD drinks.
There are four major sources of risk that could impact future growth potential for companies in the fast-moving cannabis edibles market:
- Regulatory risks:
Regulators are becoming increasingly concerned about the dosage, packaging, and labeling of edibles products
- Stiff competition:
Mega brands are entering the edibles space at a blistering pace, and could dominate market share from newer entrants
Complex layers of taxation could decrease demand for edibles, such as in California, while also pushing consumers towards the black market
- Consumer concerns:
Unpredictable dosage amounts, taste, and even toxins have surfaced as issues with the media, as consumers voice their concerns with edible products
But above and beyond these known risks, there is another potential hindrance to the edibles and beverages market that flies under the radar: how cannabinoids are absorbed into the bloodstream when ingested.
The Journey Into the Bloodstream
Unlike substances like sugar or alcohol, cannabinoids are not soluble in water. Instead, they are soluble in fats.
A substance such as sugar can enter the bloodstream within 10-15 minutes of ingesting. On the other hand, fat soluble substances such as cannabinoids have to wait – which is why sometimes edibles take hours to kick in.
Ultimately, cannabinoids are absorbed through the body’s fat. This happens in the small intestines, which help distribute them to the rest of the body.
Implications for Edibles and Beverages
For some cannabis producers, fat-solubility just means slow onset times and a generally undesirable taste. For other products, like CBD beverages, it creates bigger problems. Water and oil simply don’t mix.
To get around this, producers are using special emulsion techniques to make oil particles smaller, so that they mix with water better, increase bioavailability, and speed up onset times.
Think of this as mixing oil and vinegar. It’s your common emulsion that will separate over time, since oil and water don’t mix
Stable but thermodynamically unstable. Uses surfactants to keep water/oil binded
Stable, but uses a higher concentration of surfactants (which lower the surface tension between two liquids)
While these techniques are seeing increased usage by producers of cannabis products, they do have their own set of limitations.
Oil and water solutions still unbind over time, and products may only have a limited shelflife. Reporting by WSJ has found that these beverages also have a questionable aftertaste for many consumers, and onset times of these products are still not as fast as smoking or vaping.
It’s also worth noting that various health regulators, scientific journals, and international organizations have raised concerns about using nano-sized particles in food and beverages.
For example, the Canadian government warns that there is a “causal relationship between nanoparticle exposure and adverse health effects”, while the respected scientific journal Nature warns that nanoparticles “may behave differently within the human body”, and that “safety of nanoparticles should be judged on a case-by-case basis”.
The cannabis edibles market is poised to be the next big thing – but when it comes to how these cannabinoids get absorbed by the body, there is still much work to be done.
How will the industry and consumers move forward to capitalize on growing opportunities in the edibles and beverages market?
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