The Normalization Of Cannabis
By Matthew O'Brien
The Normalization Of Cannabis
Breaking down Weedmaps recent report on cannabis consumers…
As the legalization of cannabis sweeps across North America, consumers attitudes towards cannabis is quickly changing.
To understand the second-order effects of these legislative changes, Weedmaps has taken the initiative to quiz consumers to understand how their outlook on cannabis is changing — and much more.
Educating consumers on all of the complexity of cannabis is no easy task.
While budtenders play an essential part in the process, friends & family members play an equally important role with 56% of cannabis consumers sourcing information from family & friends.
Outside of the home, 38% of the cannabis consumers surveyed indicated that they source information from cannabis-related apps & websites.
The sum of these resources is resulting in increased consumer confidence with 51% of consumers indicating they are experts when it comes to cannabis knowledge.
Despite the fact that North America is embracing cannabis, there remains a strong stigma associated with cannabis in many regions around the world.
The good news is that this stigma is sharply declining in the U.S with 72% of cannabis consumers reporting that everyone or almost everyone is aware that they consume cannabis.
Additionally, 58% of the non-cannabis consumers Weedmaps surveyed said they don’t mind members of their social circle consuming cannabis.
Cannabis sales are on track to reach record highs in 2021 and it looks like the pandemic served as a significant catalyst with 50% of consumers reportedly increasing their consumption of cannabis during this period.
Weedmaps estimates that the overall demand for cannabis products delivered has increased 97% in the last year alone.
The increased normalization of cannabis will result in a greater demand for cannabis as it becomes more socially acceptable to consume cannabis.
It’s important for the industry to continue to invest in consumer education as the biggest barrier for the cannabis industry is the number of people globally who are misinformed when it comes to cannabis.
Big Booze Expands Into Cannabis
Breaking down Southern Glazer’s expansion into the cannabis industry…
47% of cannabis consumers reported that they have replaced at least some of their alcohol intake with cannabis.
As such, it should come as no surprise that large alcoholic beverage companies are very interested in cannabis.
Purchasing vs Partnering?
To date we have seen a number of companies make early moves into the cannabis industry.
Certain alcoholic beverage companies are purchasing existing cannabis companies, and others are choosing to partner with existing companies.
- Molson Coors partnered with Hexo to create Truss Beverages.
- Heineken created a cannabis beverage under its brand Lagunitas.
- Constellation Brands invested $4.25 billion USD into Canopy Growth.
One of the largest distributors of alcoholic beverages in the world is also showing an increasing interest in cannabis.
Founded in 1968, Southern Glazer’s Wine & Spirits is an alcoholic beverage distribution company with more than $20 billion USD in annual revenue.
As opposed to purchasing existing cannabis companies, the billion dollar alcoholic beverage giant is instead perusing partnerships with the biggest cannabis companies in North America.
Earlier this year, Glazer’s announced a distribution deal with Canopy Growth for its line of CBD beverages.
This week, they announced that they are partnering with Curaleaf — the $8.9 billion dollar multi-state operator to distribute its Hemp & Select CBD products across the United States.
The CBD market in the U.S alone is growing into a multi-billion dollar market, and this growth shows no signs of slowing down.
As we have seen with the success of Truss beverages in Canada, established alcoholic beverage companies can certainty succeed in the cannabis industry.
I understand the sense of urgency successful alcoholic beverage companies have when it comes to cannabis and I think it will become increasingly common for them to develop products for this new category.
The Billion Dollar Payments Problem
Will the cannabis industry embrace crypto to solve its payment problems?
Cannabis & crypto have grown up alongside each other over the last decade.
Both industries have experienced a significant increase in interest in recent times, and these two wildly different industries could be on a collision course.
Courtesy of cannabis being illegal at a federal level in the United States, legal cannabis companies are unable to access the U.S banking system.
For an industry on track to exceed $24billion USD in sales in 2021, this posses a huge problem for cannabis companies who are forced to use cash.
This problem has several second order effects such as cannabis companies being prime target for organized crime & customers commonly not being able to use credit cards in cannabis retail stores.
The most likely solution to this problem is for the U.S government to legalize cannabis on a federal level, however, cannabis companies are exploring alternative options.
Kyle Sherman recently joined the advisory board of a project called Nano that Flowhub could potentially use to help its customers accept digital payments.
“It’s an obvious next step for us to consider what crypto will look like as a tool to purchase cannabis.” — Kyle Sherman, CEO of Flowhub.
Flowhub is a cannabis POS platform that services 1000+ cannabis retail stores in the U.S, processing $3 billion USD in annual transaction volume.
There’s no official confirmation that a partnership is in the works, however, its very clear that Flowhub is exploring the idea.
They are not alone…
Eaze has also made clear that this is something they are looking into courtesy of a job listing for a blockchain staff engineer.
“That’s why Eaze – the leading cannabis delivery platform — is building blockchain-based seamless payment experiences across our ecosystem.”
The success of the crypto industry has given the U.S cannabis industry an opportunity to use an alternative payments rail to send and store value.
We now have small nation states adopting similar technology to allow people to send money back home from the U.S without having to pay high fees.
I like these solutions in the short term, however, when payment companies such as Stripe and Square are allowed to work with cannabis companies, I suspect they will receive greater adoption.
None the less, this is a big opportunity in the short term and I will be keeping a close eye on the companies that have announced their intent to explore new solutions that could help solve this payments problem.