5 Cannabis Industry Trends To Watch In 2021
Five trends I'll be keeping a close eye on throughout 2021
What a crazy year it’s been!
While many business leaders were busy planning out their year, an unknown virus in China had plans of its own.
“Man plans, God laughs”.
We all know what happened next. Needless to say, plans were quickly scrapped as we all adapted to this (hopefully) once-in-a-lifetime event.
In the midst of all this mayhem, who would have thought that cannabis businesses would be designated an essential service in nearly every region where cannabis is legal?
Even as an optimist by default, I personally thought the chances of cannabis businesses being viewed as essential during an unprecedented pandemic were extremely slim. Yet, here we are.
As billions of doses of coronavirus vaccines are created and we prepare to leave this memorable year behind us forever I’m personally looking forward to 2021, curious as ever to understand what the future has in store for all of us and this rapidly changing industry.
The following are five trends that I will be paying particularly close attention to throughout 2021 👇🏽
(📸 / The Green Fund)
1. New Form Factors Of Cannabis — There are plenty of new forms of cannabis coming to market here in Canada from topicals to terp sauce; however, there are two specific form factors of cannabis that I will be keeping a very close eye on in 2021.
The first form factor is cannabis concentrates. When I managed a cannabis retail store in Vancouver, we could barely keep cannabis concentrates on the shelves. One company that stands out in Canada is Premium5 extracts.
The second form factor is cannabis beverages. Like extracts, high-quality cannabis beverages have only recently become available here in Canada. One company that has really captured my attention in this category is Truss Beverages, producers of House of Terpenes, VeryWell, Little Victory & XMG which, in my humble opinion, are probably the four best cannabis beverages currently on the market.
Microdose cannabis beverages, which can be broadly defined as beverages with less than 5 mg THC, is a particular product that excites me, as I think they have the ability to attract an entirely new category of consumers to cannabis.
(📸 / BDS Analytics)
2. Substantially More Cannabis Retail Stores - This trend is by far the most obvious, and at the same time, it has the potential to have the greatest impact on the Canadian cannabis industry.
The reality is that Canada currently has a shortage of cannabis retail stores (with the exception being Alberta) and if the legal industry should succeed in displacing the black market we likely need somewhere between 5-10 times the current number of stores that are currently open.
Two provinces, in particular, that have fallen behind are British Columbia and Ontario; B.C currently has 1 cannabis retail store per 19,000 people, with Ontario having as little as 1 store per 87,000 people - compared to Alberta, which has 1 cannabis retail store per 8,357 people: As of September 28th, 2020.
Each day, we interview cannabis industry leaders from around the 🌎 and break down the most important news in the cannabis industry.
3. Prices Will Continue To Fall - Competition, as they say, is great for consumers and bad for businesses. It’s abundantly clear that the supply vs. demand situation of cannabis here in Canada is only going to play out in one way, resulting in the prices per gram of legal continuing to decline.
Few producers will be immune to this trend, and as a result, the majority of Canadian cannabis producers will have little or no choice but to reduce the price points for their products in order to remain competitive.
The way I personally like to think about this trend is that the producers who are currently marketing their products as “low prices/high THC” are currently in a race to the bottom, and as soon as one producer reduces their prices what choice will the other producers who are playing this same game have but to follow suit?
(📸 / MJ Biz)
4. More Consolidation Of Cannabis Retail Stores - A consolidation of cannabis retail stores was always inevitable as larger players sought to invest capital into the cannabis retailers who had the ambition and the management teams to scale across Canada.
Consolidation is something we have seen in great abundance on the production side of things here, and it’s becoming clearer by the day that the consolidation in this area made little-to-no business sense in hindsight.
Many producers are now moving to either temporarily close down or outright sell the cannabis production facilities which they purchased at outrageously high prices, itself a reflection of a perceived shortage of cannabis here in Canada. Current prices for these assets, however, reflect the fact that there is a 10x surplus of cannabis.
There are two Canadian companies that seemed poised to lead the consolidation of cannabis retailers here, with both Fire & Flower and High Tide having strong ambitions to continue their winning streak.
(📸 / Fire & Flower)
5. Shelf Space For Craft Cannabis - 2020 has been a rollercoaster ride for all of us, inside the cannabis industry and out, but one of the high points for me personally was seeing the return of craft cannabis products to cannabis retailers shelves here in Canada.
As a cannabis consumer who wants to support producers who have made their way into the legal market, the first year of legalization was difficult and the quality of the products simply wasn’t there. This resulted in the majority of my monthly cannabis budget ending up in the black market; however, times are changing.
With an increasing number of craft cannabis producers supplying cannabis to the legal market in Canada, I suspect many consumers will fall in love with their products as much as I have, and in turn, cannabis retailers will increasingly carve out shelf space to carry these highly sought-after cannabis products.
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