$64 Billion Dollars in U.S Cannabis Sales?

The U.S cannabis market is estimated to generate some $64 billion dollars in sales within the next 10 years.

Welcome to Four PM — a daily newsletter that provides cannabis industry news & interviews with cannabis industry leaders.

In Today’s Issue 💬

Generational Wealth From Cannabis?

Cannabis Reform in Nevada

→ Building A Successful Cannabis Brand

Jeffries Cannabis Prediction

One of the largest investment banks in the U.S has become very bullish on the future of the legal cannabis industry

Cannabis is currently one of the fastest-growing industries in America.

Despite all of the challenges such as:

Not being able to access basic banking services.

→ The inability to list on U.S stock exchanges.

→ Not being able to use Facebook or Google ads.

→ The inability to write off business expenses.

In the face of all of these challenges, the U.S cannabis industry continues to thrive.

Looking Long Term

With this continuous growth of the U.S cannabis industry, we are witnessing the creation of many multi-billion dollar cannabis companies, and big investment banks are taking notice.

Last week, Jeffries, which is one of the largest investment banks in the world (valued at some $8 billion USD) announced their positive outlook for the U.S cannabis industry.

They estimate the U.S. cannabis sector will grow at 14% each year over the next decade, lifting sales from $17 billion in 2020 to $64 billion USD by 2030. 

Better = Bigger?

It was clear that Jeffries favor betting big on the larger cannabis companies that currently operate in multiple states across the U.S, citing they anticipate significant increases in many of these companies stock prices which creates a “generational wealth opportunity” for investors.

Despite the uncertainty as to when the U.S will legalize cannabis at a federal level, which Jeffries expects won’t happen until 2026 — in their eyes, the potential rewards of betting on these companies outweighs the risks.

Our Take

Once again we are seeing more & more people accepting the idea that cannabis, and the legal cannabis industry are here to stay.

I personally don’t concern myself with the prices of cannabis stock, however, this report highlights the continued growth of the U.S legal cannabis industry — this I view as the most important insight.

Athletes In Nevada Can Consume Cannabis

The Nevada State Athletic Commission changes its position when it comes to athletes consuming cannabis in the State

The Nevada State Athletic Commission, which is one of the top regulators in combat sport has voted to remove its ban on THC.

"We should always be at the forefront of these issues," — NSAC chairman Stephen J. Cloobeck.

"I believe it's warranted and merited since (cannabis) is legal in this state. ... I think we need to jump forward, being the leader as we've always been."

While athletes will still be tested for THC for “data purposes” over the next six months, they will then decide whether or not to stop this testing.

Our Take

Change comes quickly when there’s money to be made, as is the case in Nevada.

The fact that these outdated rules would prevent some of the most talented athletes in the world from competing in Nevada is all that was needed for the Nevada State Athletic Commission to update its policies or risk losing all of the commerce that is created for their local economy from these events.

Branding Outside Of Cannabis

Should cannabis brands be thinking about expanding their brands outside of cannabis to help build awareness?

Building a successful cannabis brand is a tough task for even the most talented marketers.

While many people talk about the cannabis industry being a “consumer packaged goods industry” — one of the biggest differences between cannabis and every other CPG industry is the limited locations where cannabis brands can advertise their products.

This is made worse in regions like Canada where cannabis brands are heavily restricted in what they can place on their product's packaging, the fact that they can't offer product samples, or even sell merch.

Successfully building a cannabis brand within these constraints is a challenge, however, we are seeing more & more brands exploring very creative approaches & winning.

From Cannabis To…

Tilray, who recently merged with Aphria is doing a first for the Canadian cannabis industry, as their brand Broken Coast which started in cannabis is now expanding into alcohol via a collaboration with Sweet Water.

It’s worth mentioning that Tilray owns Sweet Water which they acquired for $320 million USD in 2020, and as such, they were able to make this deal happen without having to convince any external stakeholders.

Entering Cannabis

We have seen alcoholic beverage brands such as Blue Ribbon & Ace Valley expand into cannabis, however, there may be some advantages of cannabis brands expanding outside of cannabis.

Cannabis + Apparel

Cookies — which is one of the most iconic cannabis brands in the world also has a very successful merch line.

This merch line offers Cookies many advantages:

It has allowed Cookies to create a brand that is much bigger than just cannabis, and potentially reach an audience that doesn’t consume cannabis.

It allows Cookies to operate social media accounts that don’t run the risk of being deleted as they're not promoting cannabis products.

The clothes we wear also play a significant part in any culture, and with Cookies having so many fans willing to wear their merch — they are currently able to build brand awareness in a way that very few other cannabis companies have even attempted.

Our Take

I’m unsure if this specific product by Broken Coast will be a winner, however, the idea of taking a cannabis brand and lending it to another product category that is regulated differently is extremely interesting.

Perhaps Cookies may not offer the “perfect blueprint”, given how unique it is to have a CEO who has 2 million followers on social media, however, they have demonstrated that cannabis brands can successfully expand into new categories.

Have a great day, and I’ll talk to everyone tomorrow.

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