What To Expect From The Cannabis Industry In 2023
A new year brings new challenges and opportunities for growth in every sector, especially the cannabis industry. The market is facing major changes from business operations and ownership to how brands approach consumers.
Mixed into this is economic uncertainty, but also the chance to expand as a more informed public with favorable attitudes could drive greater advocacy to overcome legal constraints.
Here’s what to expect from the cannabis industry in 2023:
As the cannabis industry continues to grow into a mature market, there will be an increased need for greater innovation from cannabis businesses and the agricultural sector to cater to knowledgeable consumers. These trends include developing new tools and techniques and using emerging biotechnology to improve productivity and consistently create high-quality and potent products.
Cannabis technology, such as Mobius, can give businesses a competitive edge in the farming, cultivating, and manufacturing processes. It also allows businesses to expand their product ranges and appeal to varying consumers at different stages of the market. Some of the most important operational machines that could become standardized include vertical farming techniques, genetic engineering to design one-of-a-kind and personalized cannabis, and digital lighting, among many others.
Product Diversity And Consumer Segmentation
Emerging technology will enable the cannabis industry to diversify its product lineup and create a preference-based variety for each market segment. For instance, new consumers hesitant to explore the smoking aspect can be met with edibles, cannabis-infused sports drinks, snacks, and baking ingredients. In contrast, established consumers continue with their flowers, vapes, concentrates, and tinctures.
Furthermore, the health and wellness-focused messaging will allow the industry to tap into the health-conscious and lifestyle market for consumers looking for a substitution pharmaceutical medicine. In this case, increased research and information sharing about medical marijuana will play a major role in gaining further public support for legalization and expanding medical marijuana programs and licensed doctors across each state.
Advertising regulations preventing the marketing of cannabis goods in traditional media will remain an obstacle. So, the industry will look for creative ways to continue marketing cannabis products and brands to the target consumers.
One emerging trend is brand partnerships with entertainment and sports celebrities and lifestyle-based social media influencers. Doing this can bring credibility and legitimacy to brands while harnessing the mainstream appeal and wide reach of celebrity followings.
Furthermore, digital marketing tactics such as creating SEO-optimized content for online marketplaces and publications will be another means to partner with pro-cannabis media and cross-promote to a shared audience and focus on building a social community.
Greater Legalization Efforts
The growing public knowledge and approval of cannabis and its potential for medical purposes will likely lead to greater efforts toward the goal of federal legalization. Despite facing challenges in conservative southwestern states and at congress, more states than ever are willing to implement reforms that expand current laws.
Some important developments include decriminalizing possession, allowing recreational, home-growing, and medical use, and cannabis banking reforms on legislative tables. Trends also forecast that the industry could be headed for more e-commerce startups once federal restrictions are eased to allow accessible cannabis product shipping.
Mergers And Acquisitions
With the industry reaching peak growth and maturity, the cannabis industry could see continued consolidations with mergers and acquisitions in key areas such as New York, Colorado, and Washington. However, the industry will record fewer multi-billion dollar deals with less value reaching about $USD500 million maximum.
Larger corporations will likely absorb small-scale cannabis businesses to increase their hold on multi-state markets and expand as legal frameworks change in different jurisdictions. The major driver of consolidations is the unpredictability of legalization across the states and a few economic challenges like high-interest rates and falling prices. Thus, M&A will be the way the industry creates more stability on a macro level.
The cannabis industry has come a long way since its legalization in various states and countries. With more and more countries embracing the use of cannabis for medicinal and recreational purposes, the industry is poised for even more growth in the coming years.
The most poignant expectations from the cannabis industry include the rise of new technology, scientific research, and general public knowledge. This will likely lead to greater support for the legalization movement and new consumers willing to try the larger variety of tailored cannabis products.
Furthermore, small-scale mergers and acquisitions will continue to create a more corporate ecosystem of the cannabis industry that will allow for celebrity partnerships that bypass marketing limitations. In the end, market trends show a maturing industry that still faces economic uncertainty, a possible recession in 2023, and a continued push and pull in the efforts toward legalization and commercial reforms.
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