10 Cannabis Industry Predictions for 2022.
1) Demand For Minor Cannabinoids
There are over 140 known cannabinoids.
For decades, THC & CBD have been by far the most popular cannabinoids.
Today, however, times are changing as cannabis brands continue to embrace new cannabinoids such as CBN and CBG.
In California, total sales for CBN products increased 120% from 2020 to 2021, however, from my standpoint this is just the beginning.
Because value is currently measured in the cannabinoid concentration of a product, and cultured cannabinoids are going to significantly undercut the current method of producing cannabinoids ie. cultivating cannabis.
In 2022, keep a close eye on companies such as Cellibre & Cronos Group as they continue to improve their technology to produce cultured cannabinoids.
2) Dwindling Celebrity Endorsements
Global cannabis sales will exceed $37.4 billion USD in 2021.
As the global cannabis industry continues to grow, the cannabis industry continues to attract more & more celebrities.
In 2021, DJ Khaled & Justin Bieber launched their own cannabis brands following in the footsteps of Seth Rogen, Snoop Dog, Martha Stewart, Willie Nelson, Lil Wayne & Wiz Khalifa who have all already paved this path.
In 2022 we will continue to see more celebrities enter the cannabis industry, however, as cannabis continues to become more normalized, less attention will be paid to celebrities endorsing cannabis brands.
Companies such as Cann & Houseplant standout as the best examples of how to successfully work with celebrities.
3) Canadian Craft Cannabis
One of my predictions for the cannabis industry in 2021 was the continued success of craft cannabis in Canada.
Courtesy of Deloitte’s data it’s clear that 2021 was a great year for the craft cannabis industry in Canada.
In Canada, although there is a very significant surplus of cannabis products – there remains a shortage of high quality cannabis flower.
From the consumers I have spoken to in Canada, the quality of the cannabis flower available has significantly improved.
This is in large part due to craft producers in Canada, who focus on producing the highest quality cannabis as opposed to the highest quantity of cannabis.
4) Increased Demand For Infused Cannabis
In 2021 I focused on learning more about the cannabis industry in California.
One of the biggest differences that stood out was the success of infused cannabis products in California, and the absence of them in Canada.
Regulations played a key role in restricting the growth of this category in Canada, however, it was recently clarified that Canadian companies can infuse cannabis pre-roles with cannabis concentrates.
The best example of a company that infuses their dried cannabis flower with cannabis concentrates is Jetters.
Jetters sells over 2 million units per month in California, and is now the top pre-roll brand in the U.S.
An opportunity: Build the hardware that automates the process of cannabis producers infusing their dried flower with cannabis concentrates.
5) Cannabis Software Consolidation
Consolidation has been a constant theme in the cannabis industry since 2018.
One area of the cannabis industry that has remained somewhat sheltered from this consolidation is cannabis software companies.
In 2021 Dutchie acquired both Greenbits and LeafLogix, and Fyllo acquired CannaRegs and DataOwl, however, with over 180 cannabis point of sale platforms in the U.S — cannabis software wills see additional consolidation.
It’s difficult to say with certainty which companies will lead this consolidation, however, WeedMaps & SpringBig have made it clear that they intend to perform M&A.
For certain cannabis software companies, I suspect they will have the confidence to build their own products in house, however, for others it will make sense to acquire smaller companies to boost revenues.
6) Little Change In Canada
Canada has done an exemplary job demonstrating to the world that legalizing cannabis is the right decision.
Nonetheless, there remains a number of areas of potential improvements.
It’s my perspective that the primary problems constraining the Canadian cannabis industry don’t come from the federal policy makers, rather they come from the provisional policy makers.
One example is having centralized distribution centers owned and operated by provincial governments, as opposed to allowing cannabis producers and cannabis retail stores to have direct relationships.
Today, the provincial governments have made such substantial investments to build the necessary infrastructure to support these models that it’s very unlikely they will seek to remove themselves anytime soon.
7) No Cannabis Retail Stores In Mexico
An additional cannabis industry prediction I made for 2021 was that Mexico would fail to commence cannabis sales in 2021.
Unfortunately this prediction proved to be correct, much to my disappointment as adults living in Mexico are still unable to purchase legal cannabis products.
The government has 18 months from when they legalize cannabis to then issue cannabis retail licenses, however, it remains unclear when this legislation will be passed.
Given how long it has taken to pass the legislation to legalize cannabis in Mexico, and how long it continues to take – I think it’s unlikely that cannabis retail stores will be opening in Mexico in 2022.
8) Capital Flows To Europe
Germany’s decision to legalize adult-use cannabis is a major stepping stone for the legal cannabis industry in Europe.
With a population of over 83 million people, Germany will be one of the largest cannabis markets in the world when sales ideally commence in 2024 or 2025.
As such, it’s likely significantly more capital will be allocated to Germany cannabis startups in 2022.
Outside of Germany it’s becoming ever more clear that Europe as a whole is slowly starting to embrace adult-use cannabis with Malta having recently legalized cannabis for adult-use purposes.
Each of these changes creates new opportunities, and I will be shocked if more capital is not allocated to European cannabis startups in 2022.
Nations to watch: Germany, Italy, Switzerland, U.K
9) Cannabis Meets Crypto
As a second order effect of the failure on the part of U.S lawmakers to allow cannabis companies to access the banking system, U.S cannabis companies are becoming ever more interested in alternative solutions.
Thankfully, there are new solutions available to cannabis companies, and as long as the U.S doesn’t pass the safe banking act, I am quite confident cannabis companies will have sufficient incentives to adopt new solutions.
Two industries that have grown up alongside each other over the past decade are the cannabis industry and the crypto industry.
In the last 4 months, Eaze which is valued at $700 million USD has begun hiring for a staff blockchain engineer, and Flowhub’s CEO Kyle Sherman joined Nano’s Advisory Board which is a crypto payments company.
Keep a close eye on this space in 2022.
10) 420,000+ Cannabis Jobs
I can’t claim too much credit for this prediction as it’s merely a matter of doing some rather basic math to identify that the legal cannabis industry in the U.S will provide over 420,000 full time jobs in early 2022.
Nonetheless, it brings a big smile to my face to know that the legal cannabis industry in the U.S will employ more than 420,000+ people full time in 2022.
The question remains, however, how many people will the U.S legal cannabis industry employ before the U.S government federally legalizes cannabis?
With the legal industry having added a further 77,000 full time jobs in 2020 alone, my best guess is that the legal cannabis industry in the U.S will employ over 750,000 people by the time the U.S government enacts this change.