Cannabis is legally and socially becoming more accepted worldwide. Every year countries take measures to give their citizens freer access to at least some form of cannabis. A growing market means increased competition for cannabis companies, but with projections putting the market at $194 billion by 2025 (1), success seems guaranteed. A new trend brief from MasterControl explores what trends will help the industry reach new heights.
Trend #1: New Countries Entering the Market
It would perhaps be more correct to say these countries are entering the legal market, since they all already have some kind of cannabis market. Cannabis legislation has taken a backseat to governments trying to deal with COVID-19, so some of the expected progress in these countries has been delayed. However, that delay is temporary and sooner or later legalization of all forms of cannabis, regardless of tetrahydrocannabinol (THC) content, is expected in several countries.
Trend #2: More Regulations, More Specifics
Increased legalization means increased regulations. These regulations are becoming more specific to address how different cannabinoids and uses of cannabis are regulated. The percentage of THC in cannabis as a divide between marijuana and hemp is a good example. Most countries have fewer controls for hemp, but the threshold varies. In some countries, the THC content can be as high as 0.6%, but in others it has to be less than 0.2%. Constantly changing regulations make it difficult for cannabis companies to try to anticipate how regulations will develop in their markets, but there are steps they can take now that will help.
One important step is International Organization for Standardization (ISO) compliance. When it comes to producing high-quality, safe products, the ISO 9000 family of quality standards is accepted across borders and, in some countries, is the basis for official regulations. ISO certification isn’t all that common in the cannabis industry yet, but it’s a trend that’s gaining momentum.
Trend #3: Cannabis 2.0
Another trend that’s picking up is the variety of cannabis products. Cannabis food, beverages, topicals, capsules and tinctures are all becoming commonplace. Companies venturing into these categories have more regulations to follow in addition to cannabis regulations. If a cannabis company is hoping to make this investment, they can look to a country that’s already taken the leap.
Canada legalized cannabis 2.0 products at the end of 2019. Since products have only been on the shelves for a relatively short time, it’s hard to know how successful these categories will be. Projections estimate that in 2020 the Canadian cannabis market will bring in $3.7 billion, $900 million of which will be from cannabis 2.0 products. (4) The pandemic has complicated things, making it unclear if the first half of 2020 is an accurate reflection of how cannabis 2.0 will fare.
Trend #4: Digital Cannabis Manufacturing
Manufacturing in every industry is experiencing its fair share of transformation through robotics and automated processes. Cannabis is no exception. For companies that produce large batches of medicinal or recreational cannabis products, new technologies are essential for meeting demand while ensuring quality. Companies need:
The list above illustrates just the bare minimum for survival. Being competitive requires more investment in more technology. Robotics, automation and artificial intelligence are more common in manufacturing, and their use in cannabis manufacturing is accelerating.
The cannabis industry is growing fast and in many ways is unpredictable. For cannabis proponents, the legalization and loosening regulations that seem to be a worldwide trend are encouraging. As things slowly normalize after COVID-19, lawmakers will get back to legalization. With that will come new regulations that are more specific and stricter. This will benefit all categories of cannabis and be a particular advantage to those companies most concerned with quality and safety. All eyes should be on Canada to see how cannabis 2.0 will play out there. Regardless, companies should be investing in technology to speed up their processes and get their products to market faster.