As 2024 ramps up, significant changes are expected to propel cannabis businesses forward. Here are 9 key predictions that will make an impact on the cannabis industry this year.
1. Increased Capital Investment
One of the major hurdles for those in the cannabis industry has been obtaining the capital that owners need to invest in their businesses. As legalization efforts continue to find more success, the industry will grow and expand, opening the door for new businesses requiring capital. This will drive the need for more capital investments, and new investors will get on board.
One factor that many industry leaders believe will drive further investments in the industry is the hope that cannabis will be rescheduled from a Schedule 1 substance to a Schedule 3 in 2024. This change will increase the profitability of cannabis businesses the moment it takes effect by supplying more chances for capital raises, promoting investments in innovation, and the ability to ramp up struggling businesses.
2. Heightened Merger and Acquisition Activity in 2024
Mergers and acquisitions (M&A) will become a bigger part of the cannabis landscape as businesses seek strategic partnerships to scale up in a rapidly growing industry. Previous years of slow cash flow, heavy debt, slow rollout programs, and undisciplined spending have kept M&A to a minimum.
However, 2024 will see businesses determined to build a robust, disciplined operation rise to the top with smart M&A activity. Strategic actions that are taken now will carve out a path to success over the next five years. This will be especially true for small or mid-sized businesses that embrace strategic partnerships that allow them to outperform larger operations.
3. Progressive Research and Development
Another cannabis industry prediction for 2024 centers around research and development (R&D). Before the legalization of cannabis in numerous states, there was a lack of substantial and dependable research, even within the medical field. Increasing government support will present new opportunities in the R&D field that will lead to new possibilities and better products.
For instance, UC San Diego Health has already planned cannabis trials for 2024 that include studies about the brain’s pain relief mechanisms, retroviral therapy, HIV, bipolar disorder, migraines, and diabetic neuropathic pain relief. These types of studies will bring innovative new products to the market.
4. Cannabis Sales Increasing in 2024
The legalization of cannabis in more states will promote the opening of even more dispensaries. The added availability of cannabis products in new locations is expected to bring the market value to $35.2 billion in 2024. This continued growth could push the industry to as much as $102.90 billion by 2028.
Licensing caps, limited opportunities to enter new markets, and capital concerns will continue to curtail retail expansion in some states in 2024. Other markets are expected to increase the retail cannabis presence significantly. For instance, both Ohio and New York will see a sharp increase in sales thanks to a change that allows for the expansion of existing medical cannabis dispensaries. In Florida, the lack of licensing caps and wholesale distribution will see considerable scaling up in the retail market.
5. Additional Pressure to Decriminalize Cannabis in 2024
It is expected that calls from the public for decriminalization of cannabis possession and expungement of federal criminal records will continue to grow. As 2023 drew to a close, President Biden answered their calls by announcing that pardons would be available for thousands of people who had been convicted of simple possession or use charges on federal land or in Washington D.C. He also granted clemency to 11 people serving excessively long sentences for non-violent drug offenses, paving the way for further decriminalization.
6. Accepted Mainstream Usage
More first-time cannabis consumers will enter the market as legalization expands. With the taboo of cannabis use quickly becoming a thing of the past, the popularity of cannabis products will only continue to increase. A 2023 study conducted by Civic Science revealed that 21% of the individuals who took part in Dry January substituted alcohol with cannabis or CBD products. This number jumped up to 34% among users aged 21-24. It is likely that this Dry January will yield similar, if not higher results in a conversion from alcohol to cannabis, adding many first-time cannabis users. This is also reflected in a Pew Research Center poll that shows that 59% of Americans believe that cannabis should be legal for medical and recreational use by adults.
7. Increased Consumer Diversity
Legalization has broadened the diversity of consumer demographics, as ordinary people of all genders, ages, and walks of life are entering the cannabis market daily. Women and Gen Z have emerged as significant consumer groups this past year.
Additionally, a 2023 YouGov poll shows that 52% of adult Americans say they have tried cannabis in some form during their lifetime. While Gen Z might account for more new users entering the market, adults between 45 and 64 made up 63% of those who said they’d tried cannabis at some point.
8. Widespread Consumer Knowledge
With cannabis use becoming far more common, consumers will want to know more about the products they buy and the benefits they provide. This will bring more consumer awareness as R&D initiatives are made public. Additional information will only bring more questions, fostering a healthy discussion of cannabis and its benefits.
9. Innovative Product Development
R&D efforts will result in improved effects and delivery methods being developed that can be utilized by both the medical and recreational cannabis use industry. This will be reflected in the expanded array of cannabis products available to consumers.
Minor cannabinoids and terpenes are a particular focus. Despite their small concentration within the cannabis plant, researchers are finding these may have relatively unexplored health benefits as anti-depressants or have preventative abilities for cancer. Though this type of research is in its early stages, it is already showing promise in creating better oral dosage formats with higher bioavailability.
Wrapping Up the 2024 Cannabis Industry Predictions
It is expected that 2024 will become a pivotal year in the cannabis industry, with increased investments, strategic mergers, groundbreaking research, and continued market expansion. Evolving societal acceptance and a diverse consumer base will help propel cannabis businesses toward growth, making it a banner year for savvy entrepreneurs who take advantage of the ever-changing cannabis landscape.
The information for these cannabis industry predictions was sourced from KayaPush’s 2024 State of the Industry Report. Download the full report for key insights to prepare your business for 2024.
