With medical marijuana legal in 39 states, and recreational cannabis legal in 21 states, the cannabis industry has skyrocketed in the past several years. Understanding the state of the emerging cannabis industry means staying abreast of trends we started to see in 2022. From mergers and acquisitions to advances in technology to major legal reform, these trends are showing no signs of slowing down as we prepare to wrap up Q1 of 2023.
Let’s take a look at the five most influential trends driving the cannabis industry in 2023.
While federal legalization continues to be a barrier to the growth of cannabis-related businesses across the country, increased legalization at the state level is moving the fledgling industry forward. Almost two-thirds of the country support federal legalization, a figure that is expected to continue to rise as public stigma fades and the benefits of decriminalization become even more clear.
As is typical of any industry experiencing rapid growth, the biggest companies in the emerging marketplace—Green Thumb, Curaleaf and Aurora, just to name a few—are poised to become even bigger in 2023. These emerging industry giants are absorbing smaller local operators, hoping to capture new jurisdictions now before the market is saturated.
Health and Wellness Messaging
Cannabis has been the subject of research for many years. As results are published, there is mounting evidence that compounds found in cannabis may possess anti-inflammatory and anti-cancer properties in addition to alleviating symptoms of epilepsy, multiple sclerosis, depression, glaucoma and Parkinson’s disease. Communicating these benefits to the general public is positioning cannabis as an alternative to traditional medicine.
From gummies to edibles and more, cannabis-infused products are making significant inroads with customers who have never tried cannabis before. These innovative products are especially appealing to those who find smoking intimidating. On the business side, cannabis cultivators and distributors have experienced unparalleled growth in productivity and profit. New technologies are making it possible for more products to be delivered to stores at a significantly lower cost.
Evolving Buyer Preferences
Although cannabis flower has been losing ground since 2019 to iterations of the product, it still led sales in 2022 and early 2023—a trend that is expected to continue through the year. According to a November 2022 report by Headset, Cannabis sales projections for US markets in 2025 | Headset (a leading cannabis data and market intelligence company) the U.S. cannabis product sales break down by market share as follows:
- Flower: 40.8%
- Vapor Pens: 23.5%
- Pre-roll: 12.2%
- Concentrates: 8.0%
- Beverage: 1.1%
- Tincture and Sublingual: 1.0%
- Capsules: 0.9%
- Topical: 0.7
As we prepare to wrap up Q1 of 2023, some are predicting a reset for the fast-growing cannabis industry. The most successful businesses will likely continue to grow if they have the resources and tools developed to navigate a rapidly growing industry, and are ready to shift their approach quickly when needed.