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Cannabis Beyond 2021

As 2020 shuttered many businesses, the (essential) cannabis industry swelled with over 150% revenue growth. Post-election there are now 14 states with legalized medical and recreational marijuana programs. It seems the future of the industry is under bright bloom lights.


Today, the industry focuses on delivering THC products to consumers and building the organizations, services, and equipment that will enable cannabis reach the market at scale. What does the next 5 or 10 years look like as the expanding market touches the nation?


Legalization Tensions and Expansion

In the next 2 or 3 years many so-called expert talking heads believe we'll see full decriminalization and legalization of cannabis Federally in the United States. Although, we don't see this as likely, since people are still being arrested for plants. However, national legalization would open the floodgates for Fortune 500's to make their moves and subsequently roll-up the industry.


Their goal? Squeezing as much money as possible from cannabis. Continuing the trends of rapid M&A to acquire the greatest market share. The largest MSO's move is to take power away from smaller brands, and push out the grassroots effort to serve their big box partners.


What we see happening — crony capitalists are using political connections to take away homegrows and boutique businesses, leaving the industry with low-quality products, and ignoring victims of the war on drugs in their wake.


For the next 4-5 years entrenched brands and canna-preneurs in newly licensed states lead the story around cannabis. Up to now, risk-averse big money invests heavily in ancillary equipment & services, IP, equipment, and technology that enables rapid scalability and market reach. Ease-of-expansion will lead the biggest money from investment firms, driving corporate M&A.


Media outlets have the unique position of catalyzing change and brand equity in the industry. Companies like Leafly, Leaflink, Sensi Magazine, Green Flower Media, and other key players will be purchased as advertising and education outlets for the biggest brand portfolios. Is this unfair to the smaller brands? We'll see.


Big box brands, alcohol, tobacco, and pharma are all getting into the cannabis game. In this theoretically open legalized market, they hope to infuse their portfolio with high growth assets — cannabis brands.


The emerging "canna-curious" market likely becomes largest THC consumers by 2025. Almost dwarfing the "traditional THC market" by 2030.


We believe it's going to take longer to bring national decriminalization to the forefront.


Where does this leave current brands in market?


Who's going to win big?

Politicians, lawyers, plastics, and Fortune 500 money. In addition, equipment, real estate, consumer packaged goods, and THC verticals positioned to enable production at scale.


Other key winners: consultants, construction services, lighting, nutrients, and staffing agencies.

Dispensaries are important for the next 3-5 years in the boutique & medical cannabis market. Grows are in high-demand in newly legalized states, like Arizona and Michigan, who can't get enough supply.


In 10 years, delivery services and big box retailers are looking to take a large piece of the cannabis retail market. Who will be going to dispensaries? People looking for high quality and top-tier flower, concentrates, and potent medical cannabis. The expanding canna-curious market will be more loyal to dispensaries and brands that educate them first, provide innovative products, and customer experience.

Our prediction: Big-box retailers will not be putting THC on the shelf by 2030 or earlier.


Who's really winning?

Consumers.


Prices are going down. Quality, options, and education are going up. More products on the market with better research and production technology.


Lower prices drive larger adoption. Competition from the national brand markets will drive down prices for boutique products in favor of traditional consumers.


More canna-curious people entering the market will lead to more long-term customers — a big win for everyone.


Brands that position themselves as market leaders and own a regional or national market segment will be ripe for harvest. Intellectual property owners, media outlets, ancillary services providers, and businesses that develop scalable solutions will win big in the national commercialization efforts.


Good News

Cannabis Venture Capital is hopeful about the future of the industry. Cannabis will continue to thrive and take a greater position in society. We believe agile canna-preneurs building up the industry can mature as the market shifts. Companies still have time to develop organizations, assets, IP, and business plans to best serve shareholders, employees, and customers.


We're bringing real cannabis advocates and industry veterans into the national marketplace. Let's rally against legalization moves that cripple the real industry — the people who took the risk and fought to bring quality plants to patients.


Wyatt Lampley,

Co-Founder, Brand Strategy

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