Imagine being an investor in Microsoft at the time of the company’s IPO in 1986. Or better yet, buying Amazon shares while it was still just an aspiring online book store in the late 1990s.
Chances to be an early adopter in the next billion-dollar industry are far and few in between – but it’s exactly what is happening today with the nascent cannabis market. After close to a century of prohibition, cannabis is back in the limelight as legalization rolls across the U.S. and Canada.
Visualizing the Retail Boom
Today’s infographic from Choom Holdings Inc demonstrates the consumer interest in retail cannabis, and the challenges and opportunities that come with this potential.
Legal cannabis today is a lucrative modern market in the U.S. and Canada. In 2018, sales were $10.8 billion – and they are expected to grow to $47.3 billion by 2027.
Who’s driving this growth? A recent survey reveals that:
- 58% of U.S. cannabis consumers use it at least once a week
- 66% of these weekly users are millennials, aged 18 to 34
- 46% of cannabis consumers who also drink, prefer it over alcohol
- 74% of cannabis consumers who also drink, believe it to be safer than alcohol
With more people using cannabis frequently, the disruptive potential of retail cannabis becomes clear.
The Cannabis Supply Issue
Colorado, Washington, Nevada, and most recently California have been among the major U.S. states to legalize recreational cannabis in recent years.
Although cannabis sales across all states have soared, there’s one caveat to mention, which is clearly seen in the case of California. As the state began selling cannabis in stores on January 1st, it also simultaneously ran out of supply when the grey market came rushing up.
This trend of pent-up demand is clear across both mature and new markets – even Canada couldn’t escape the same supply crunch, subjecting customers to long lines and wait times on day one of legalization. For example, only one legal retail store was open in the entire province of British Columbia on October 17th.
It’s not surprising to see why cannabis is such a valuable retail product, though: dispensaries typically outsell Whole Foods and other similar retailers.
[table “405” not found /]
(Source: Marijuana Business Daily)
The Value Play in Cannabis
Seizing an early adoption opportunity is a best-case scenario in the investing world.
Today, such an opportunity may come in the form of retail cannabis. The segment still faces specific hurdles, but these challenges have the potential to convert into golden opportunities as the market matures in North America:
1. Inherited demand
Legal retailers will reach new consumers as the grey market begins to come online.
2. Strong foundation
Retail cannabis is only legal in ten U.S. states, but it already shows strong promise.
3. Building bridges
Retail cannabis stores are just now opening in Canada, but licenses are hard to get.
Retail cannabis is a brave new world for consumers and investors alike – and early entrants to the industry with access to capital and a large retail footprint will likely lead the charge.
The Consumer Potential of Retail Cannabis
The cannabis industry is evolving fast, and it’s being driven by consumer preferences. See the growth of retail cannabis, and the trends shaping the future.
The Consumer Potential of Retail Cannabis Products
“Eat, drink, and be merry” is becoming an increasingly common mantra for cannabis consumers.
It’s also a refrain that speaks the evolving demand picture for cannabis in a post-legalization environment, as it becomes clearer what products consumers want to see coming from the sector.
Today’s infographic comes to us from The Green Organic Dutchman, and it dives deeper into the profound investor potential in cannabis retail products, like edibles and concentrates.
The Allure of Retail Products
As the business of cannabis matures, several trends are directing its course. Consumer spending in North America is ballooning overall, but growth largely depends on the product type.
|Trend||↓ 14pp total share|
(from 50% to 36%)
|↑ 2pp total share|
(from 12% to 14%)
|↑ 13pp total share|
(from 23% to 36%)
|↓ 1pp total share
(from 15% to 14%)
While seasoned consumers prefer smoking cannabis, other consumers are actually drawn to alternative forms that the plant comes in. Proprietary research from New Frontier Data reveals the products that most appeal to potential U.S. cannabis consumers:
- 69% solid edibles
- 54% liquid edibles
- 44% topicals
- 36% joints or blunts
- 32% vaporizers (vapes)
- 29% tinctures
- 21% concentrates
- 19% pipes / water pipes
The rising popularity in retail cannabis-derived products is being directed by consumers – and they’re using products for everything from relaxation to pain management.
Variety is the Spice of Life
Food and beverages, along with wellness products, are proving to be a huge draw.
Food & Beverages
Most people are aware of pot brownies, even if they haven’t tried them. The best known cannabis edibles are baked goods, and these days they’re also found as candy and chocolate.
Cannabis-infused drinks are also growing in popularity, in both alcoholic and non-alcoholic forms. Cannabis-infused water, juice, tea, coffee, and even kombucha are legally making their way onto grocery store shelves.
Of course, before edibles can become fully mainstream, there are a few considerations: stricter regulations for product consistency, not to mention appropriate packaging and labeling to keep them away from children. As an example, Canada will start allowing edibles and other products in October 2019, as they iron out these kinks a year after full legalization.
Health & Wellness
Cannabis has been treasured for its medicinal and therapeutic properties for centuries. In the present, it has re-emerged in an intersection with the wellness industry. In fact, many consumers are already using CBD-infused products in their daily life:
- Relieving anxiety
- Enhancing sleep
- Managing pain
- Personal care
Importantly, retail cannabis products are also helping consumers reduce their dependence on medications, and to kick unhealthy habits.
A Consumer-Driven Future
Consumers are not just eating cannabis up, but they are also drinking, vaping, dabbing — and the list goes on.
For these reasons, investors should keep an eye on the fast-changing multitude of products and trends within the sector, as they provide some of the best opportunities going forward.
In the final part of this series, we’ll dive into the role that the cannabidiol (CBD) compound plays in the cannabis market.
The Science Behind the $13 Billion Medical Cannabis Industry
A deep-dive into the science behind the medical cannabis industry can provide some investor insight into what makes it a multi-billion dollar market.
The Science Behind the Medical Cannabis Industry
There’s nothing quite like cannabis in the plant kingdom. Beneath its humble surface, over 750 unique compounds exist within – all of which have helped propel the cannabis industry into the multi-billion dollar market it is today.
Today’s infographic from The Green Organic Dutchman takes a deep dive into the cannabis components which contribute to its therapeutic potential, how it interacts with the human body, and the ways it can be consumed.
The Chemical Effects of Cannabis
While many people would be familiar with THC and CBD as the two major cannabinoids, there are a few lesser-known cannabinoids which also play important roles: Cannabichromene (CBC), Cannabigerol (CBG), Cannabinol (CBN), Tetrahydrocannbivarin (THCv), and Tetrahydrocannabinolic acid (THCa).
In different combinations, they work together with terpenes – aromatic oils that are present in most plants – to provide relief for a variety of ailments.
|Pain/ Sleep||CBD, THC||Cramps, Migraine|
|CBC, CBD, CBN, THC||Insomnia|
|CBC, CBD, CBN, THC, THCv||Pain|
|CBC, CBD, CBDa, CBG, CBN, THC, THCa||Arthritis, Inflammation|
|CBD, THC, THCa||Crohn’s disease|
|Mood/ Behavior||CBD, CBG||Anxiety|
|CBD, THC||ADD/ADHD, Stress|
|CBD, CBG, THC||Bipolar disorder, OCD, PTSD|
|CBC, CBD, CBG, CBN, THC||Depression|
|Neurological||CBC, CBD, CBG, CBN, THC, THCa||Amyotrophic Lateral Sclerosis (ALS)|
|CBC, CBD, CBG, THC, THCa||Parkinson’s, Alzheimer’s|
|CBD, CBN, THC, THCa||Multiple Sclerosis|
|CBD, CBN, THCa, THCv||Epilepsy, Seizures|
|Other||CBC, CBD, CBDa, CBG, THC, THCa||Cancer|
When cannabinoids and terpenes interact, the human endocannabinoid system is already equipped to deal with the entourage effects that are created.
Modern-Day Medical Cannabis
It’s clear that many cultures embraced cannabis long before scientific research came into play. Its therapeutic properties were widely recorded and extolled around the world.
After decades of restricted access and stigma, the tide is turning back towards what our ancestors discovered long ago. Millions of patients rely on medical cannabis today, with Canada and Israel paving the way in cannabis research.
Medical cannabis has been legal nationwide since 2001, aiding scientists in studying its effects.
Funding: CAD$1.4 million (US$1.05 million) invested by the government towards research projects.
Since the 1990s, medical cannabis has been legal for patients of cancer, chronic pain, and PTSD.
Funding: 8 million shekels (US$2.16 million) annual government funding to support innovation.
Back in the day, typically only dried cannabis flower was used. However, consumption methods have evolved into three broad categories today: ingestion, inhalation, and application.
The dosage of cannabis consumed is easy to control using edibles or beverages, tinctures or sprays, and capsules.
The effects of cannabis are quickly felt through smoking, vaporizing, and/or dabbing concentrates.
Transdermal patches and topicals like balms offer localized relief through a controlled dose.
Each of these methods have their own pros and cons, but in the end, they all offer the medical cannabis patient with a wide variety to choose from. Some of these forms, such as topicals and edibles, even lend themselves to the rapidly growing consumer cannabis segment.
In the seventh part of this series, we’ll delve into the rise of retail that’s set to disrupt the cannabis industry.
Markets4 months ago
The Jeff Bezos Empire in One Giant Chart
Maps7 months ago
Mercator Misconceptions: Clever Map Shows the True Size of Countries
Advertising3 months ago
Meet Generation Z: The Newest Member to the Workforce
Misc6 months ago
24 Cognitive Biases That Are Warping Your Perception of Reality
Technology5 months ago
The 20 Internet Giants That Rule the Web
Advertising2 months ago
How the Tech Giants Make Their Billions
Environment3 months ago
The World’s 25 Largest Lakes, Side by Side
Chart of the Week4 months ago
Chart: The World’s Largest 10 Economies in 2030