Just in time for New Year’s, iCAN is taking stock of the Top Cannabis Trends in 2019.
It was a year of tremendous growth and a little disappointment, but this temporary dip is just a sign of the industry’s maturity. With that in mind, these are iCAN’s Top Cannabis Trends in 2019 [with some 2020 projections].
1. Market volatility
With 2019 drawing to a close, the cannabis industry is rebounding from a year of growing pains. As Cam Battley, former Aurora CCO, explained at CannaTech in November, the winnowing in the market reflects a phase of maturity for cannabis and the fresh reality of higher standards and greater scrutiny will bring longterm stability. Investors are becoming more discerning in 2020 and will be identifying companies with a strategic advantage, strong balance sheet and clear path to profitability. Another challenge that was one of the Top Cannabis Trends in 2019 was regulatory inconsistency. Key states like New York, New Jersey and Connecticut failed to legalize cannabis, and in California, a messy patchwork of municipal laws and regulations made things difficult for business owners and consumers. 2020 will bring more consistent, comprehensive global regulation.
One of the Top Cannabis Trends in 2019 was the increasing demand for low-dose products. Small, precise dosing and responsible consumption are the hallmarks of a new category of cannabis consumer: adult users focused on health and wellness applications rather than ‘recreational’ use. These cannabis users are moving the market away from intoxication to targeted products for insomnia, anxiety, focus and others that will allow them to keep up with their daily lives. With 31% of Canadian users in 2019 aged 35-55 and similar usage rates worldwide, products with predictable outcomes and lower psychoactivity were one of the Top Cannabis Trends in 2019 and will likely continue on this trajectory in 2020.
3. Social equity
Around the world, cannabis industry stakeholders are talking about the importance of building an equitable and sustainable market model. In the US only a small portion of businesses are owned by people of colour, making promoting diverse representation a priority for many industry leaders. Six of the 18 states in the US that have legalized adult-use or medicinal cannabis since 2016 have diversity measures in place and others are expected to follow suit in 2020. Globally, one of the Top Cannabis Trends in 2019 was the conversation around impact investing. The rapid expansion of developing cannabis economies means that there is a need to develop mechanisms to include local stakeholders and protect the environment in meaningful ways. Cannabis investment can be a positive tool to generate social and environmental impact alongside financial return.
4. CBD craze
With the 2018 Farm Bill, American hemp farming experienced a four-fold growth in 2019 and a rush to get CBD-infused products to market. But the FDA cracked down on retail CBD-infused products in November, mainly because of unapproved health claims or labelling issues. Despite setbacks, it was a year of unprecedented growth, leading to a USD$4 billion industry in 2019. The continued need for concise, clear and structured regulation may be in the pipeline for 2020, allowing the CBD market to flourish. Globally, CBD is legal in a number of countries for industrial applications. The food and beverage, health and wellness and cosmetics industries experienced a huge boost in market share this year. This trend is likely to continue as more countries authorize CBD in 2020.
5. Psychedelics (not cannabis, but still…)
Two American cities – Denver and Oakland – decriminalised psilocybin in 2019, signalling that psychedelics may be on a similar trajectory to cannabis. Psychedelics including LSD, DMT, Ketamine and MDMA have become a major focus of clinical research, with outcomes demonstrating efficacy in the treatment of depression, PTSD, addiction and other mental health disorders. The FDA has fast-tracked psilocybin twice in the past year as a breakthrough therapy and recently approved a ketamine-derived treatment for refractory depression, showing that this new market is primed for early-starters. With the opening of several research centres dedicated to the study of psychedelics and the launch of a global medical psychedelic conference, this expanding industry will experience a significant boost in 2020.
All in all, it has been a year of ups and downs for the cannabis industry, with both growth and contraction characterizing this year’s market trends. In 2020, we expect to see increased stability and focus on impact investing, and the development of new, low-dose products targeting specific applications. With great excitement, we also anticipate significant growth in medicinal psychedelics in 2020.
Happy New Year from all of us at iCAN.
Wishing us all a year of connection, growth, health and success.