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.
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(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 Big Pharma Takeover of Medical Cannabis
The Big Pharma industry is entering the cannabis space, by swapping patients for patents. But what are the impacts of such a takeover?
The Big Pharma Takeover of Medical Cannabis
As evidence of cannabis’ many benefits mounts, so does the interest from the global pharmaceutical industry, known as Big Pharma. The entrance of such behemoths will radically transform the cannabis industry—once heavily stigmatized, it is now a potentially game-changing source of growth for countless companies.
Today’s infographic comes to us from CB2 Insights, and explores how and why the notorious Big Pharma are interested in the nascent cannabis industry.
Who are “Big Pharma”?
The term refers to some of the largest pharmaceutical companies in the world, considered especially influential as a group. To give a sense of their sheer size, the market cap of the top 10 Big Pharma companies is $1.7 trillion—Johnson & Johnson being the largest, with a market capitalization of $374 billion.
So far, Big Pharma has watched the cannabis industry from the sidelines, deterred by regulatory concerns. What we are seeing now is the sleeping giant’s takeover slowly intensifying as more patents, partnerships, and sponsored clinical trials come to fruition.
Could Cannabis be Sold Over the Counter?
The cannabis plant has been used in medicine for 6,000 years. However, there is still considerable debate around the role it plays in healthcare today. There are currently almost 400 active and completed clinical trials worldwide surrounding cannabidiol (CBD), a type of cannabinoid that makes up 40% of the cannabis plant’s extract.
Cannabis relies on CBD’s therapeutic properties, and recent studies suggest it may be useful in combating a variety of health conditions, such as:
- Multiple sclerosis
- Cancer side effects
As of 2019, 33 states and the District of Columbia have legalized cannabis for medical use. Its potential for pain management has led some experts to recommend it as an alternative to addictive painkillers, with one study of 13 states showing opiate-related deaths decreasing by over 33% in the six years since medical cannabis was legalized.
As the industry evolves, data is becoming increasingly important in understanding the potential of cannabis—both as a viable medical treatment, and as a recreational product. The shift away from anecdotal evidence towards big data will inform future policies, and give rise to a new era of consumer education.
Big Pharma’s Foray into Cannabis
Further legalization of cannabis will challenge Big Pharma’s bottom line, and poach more than $4 billion from pharma sales annually. In fact, medical cannabis sales are projected to reach $5.9 billion in 2019, from an estimated 24 million patients.
Seven of Canada’s top 10 cannabis patent holders are major multinational pharmaceutical companies, a trend that is not unique to Canada.
|Company Rank||🇨🇦 Canadian Patents||Company Rank||🇺🇸 U.S. Patents|
|1. Novartis||21||1. Abbvie||59|
|2. Pfizer||14||2. Sanofie||39|
|3. GW Pharmaceuticals||13||3. Merck||35|
|4. Ericsson||13||4. Bristol-Myers Squibb||34|
|5. Merck||11||5. GW Pharmaceuticals||28|
|6. Solvay Pharmaceuticals||7||6. Pfizer||25|
|7. Kao Corporation||7||7. Hebrew University of Jerusalem||19|
|8. Ogeda SA||7||8. Roche||17|
|9. Sanofi||6||9. University of Connecticut||16|
|10. University of Connecticut||6||10. U.S. Health and Human Services||13|
It comes as no surprise that many pharmaceutical giants have already formed strong partnerships with cannabis companies, such as Novartis and Tilray, who will develop and distribute medical cannabis together in legal jurisdictions around the world.
Data is the Missing Link
While the body of knowledge about the many uses of cannabis continue to grow, clinical evidence is key for widespread adoption.
Products backed by data will be a defining criteria for major companies to come into the market en masse. And ultimately, Big Pharma’s entry could accelerate public understanding and confidence in cannabis as a viable option for a range of ailments, and mark the next major milestone for the industry.
Visualizing the Boom in the CBD Beverage Market
CBD-infused beverages are considered to be the fastest growing segment in the overall cannabis market. How did this partnership of brews and bud come to be?
Visualizing the Boom in the CBD Beverage Market
It’s safe to say that the cascade of cannabis legislation has sent the world into a constant state of flux. We are witnessing a seismic shift in culture, as cannabis steps out of the black market and into unexpected industries—from big pharma, to beauty, and now to beverages.
According to Zenith Global, the U.S. CBD-infused drinks market will reach an estimated $1.4 billion by 2023, making it one of the fastest-growing segments in the overall industry.
Today’s infographic comes to us from Trait Biosciences, and outlines the magnitude of the CBD-infused beverage segment, along with some of the subsequent challenges and opportunities that will shape the future of cannabis.
CBD and its Benefits
CBD is an abbreviated term for cannabidiol, a type of cannabinoid that makes up 40% of a cannabis plant’s extract. It has become increasingly popular for relieving pain, promoting relaxation, and lifting mood without the psychoactive properties that come with THC (Tetrahydrocannabinol), the other major cannabinoid.
Recent studies suggest that CBD’s properties may be useful in combating a variety of health conditions such as epilepsy, schizophrenia, multiple sclerosis, migraines, arthritis, and even side effects of cancer.
The New Wave of Beverages
CBD-infused beverages will open the floodgates to new audiences who want to consume cannabis in different formats. They have many benefits, that will rival other methods of ingestion:
- Easy to Administer
Beverages are seen as the healthier way to consume CBD, especially compared to smoking.
- More Accessible
They are becoming more easily available in restaurants, bars, supermarkets, and online sites.
There is some evidence to suggest that CBD in caffeinated products can curtail the feeling of being on “edge”.
- Higher Precision
Dosage is controlled and, much like alcohol, consumers will be able to determine how much CBD content they want.
Both alcoholic and non-alcoholic product categories are currently being explored, resulting in some unexpected partnerships, such as Molson Coors—the world’s seventh largest brewer—and Hexo Corp, a Canadian cannabis product company.
Trends Shaping the Future of CBD Beverages
The CBD product landscape is constantly evolving. Demand for CBD-infused beverages will be fueled by three key trends.
- Changing Consumer Preferences: The decline of alcohol sales globally is evidence of changing consumer tastes. Sales are expected to fall further as more people exchange alcohol for cannabis products.
- Product Innovation: Sustainable packaging, transparency around ingredients, more convenient ready-to-drink solutions, and personalized strains are driving the furious pace of product innovation.
- Big Players and Influencers: Growing knowledge and increasing brand/celebrity endorsements are creating an established CBD industry in mainstream culture. Already, singer Willie Nelson and former NFL star Terrell Davis have put their names to two seperate lines of CBD-infused beverages.
As these trends evolve, consumers will benefit from more education around CBD, which could lead to more CBD products, like beverages, entering the mainstream across numerous industries.
What’s Next for the CBD-infused Beverage Market?
CBD purity is a primary focus area of current scientific studies. For consumers, more transparency is needed around ingredients, dosage levels, and product labeling. For example, the state of Indiana now mandates that manufacturers must label CBD products with QR codes that can be scanned to show whether they contain acceptable levels of THC, CBD, pesticides, and other compounds.
Most notably, new methods of CBD infusion will transform the beverages market. Many industry players have used nano-emulsion to infuse CBD. However, these fat-based nanoparticles have been known to accumulate in organs, causing health concerns. That’s why creating water-soluble CBD has been an emerging industry priority.
CBD-infused beverages are poised to become the next big thing and create massive economic growth—despite strict industry regulations. Scientific advancements and changing laws will unlock the potential of the CBD market, potentially disrupting the entire beverage industry.
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