Due to growing legalization, an influx of funding from venture capital firms and other investors, as well as other factors, the cannabis sector has grown significantly in recent years. Keep reading to learn more about the top cannabis industry trends that make it the fastest-growing industry today.
An ever-changing environment
The industry must adjust to a dynamic, complicated legal environment as it develops. The problem for cannabis businesses is that different nations and states within the US have different regulations governing the usage, cultivation, and distribution of cannabis. More reputable companies outside of the legal cannabis market are growing their presence as it continues to develop. Alcohol, cigarette, and pharmaceutical companies have made significant investments in the cannabis business. In order to market cannabis as widely as they market their own products, they have been buying up other businesses. In the process, completely new product lines infused with cannabis have debuted, including drinks that are being advertised as alcohol substitutes. These patterns might drastically alter the cannabis industry.
Adopting technology to increase profitability
In the cannabis industry, intangibles like a high-quality flowers, rising THC, and branding have long dominated the media coverage. Cannabis technology, however, has been gaining popularity and growing to meet the demands of the businesses it supports, choices for sector-specific technology to assist crucial operational and financial operations are becoming more advanced. Technology is still an issue because many enterprise technologies do not engage clients in the sector, while others are using this as a major point of product differentiation in order to take advantage of the available market space. By embracing technology, there has been an increasing number of marketing technology providers offering cannabis delivery services in which customers are connected online with local legal dispensary suppliers.
Out-of-home advertisements highlighting possibilities and difficulties
Cannabis firms continue to invest in billboards and signage even though out-of-home (OOH) advertising is a more traditional medium. OOH advertising is important because it is one of the few channels in which companies may invest without worrying that people will question or remove their ads. Simple, direct billboards are frequently the most successful. While OOH consumes a sizable percentage of advertising dollars for cannabis marketing, the channel has several drawbacks. A major issue is performance measurement. Lead source tracking is a useful method of gathering first-party data. It is becoming increasingly important for companies of all stripes as they deal with new consumer privacy barriers and restrictions on tracking online users.
Investing in employees
Despite the fact that the number of employment in the cannabis industry increased by 33% between 2021 and 2022 and that demand for new hires is still high, cannabis businesses are struggling with high turnover rates and a lack of trained workers. Operators are being forced to invest more time and money to recruit and keep personnel. Programs for customized benefits can help in part. Benefits that are tailored to each employee’s needs produce happy workers who contribute to the creation of an environment that draws and keeps talent. To attract and keep employees, many businesses are increasing wages, providing 401(k) plans and health insurance, adding benefits, and implementing other worker-friendly policies.
Presenting several investment options on the market
Technology and cannabis were two of the most negatively impacted industries in 2022 due to the stock market. Despite the fact that their market caps both saw big drops, the fundamentals of the cannabis industry dictate that it should be viewed differently by the market than other sectors. While markets with limited licenses and those created by new legislation may seem to offer contradictory opportunities for investors, both offer the following: States with medical-only or no legalization create growth potential, and markets with few licenses offer chances for high gross margins. Many other sectors that investors frequently target, especially the technology sector, may be reaching a degree of maturity that would restrict growth. Investors are hence increasingly concentrated on enhancing profitability and reducing costs.
Despite its expansion and increasing social acceptance, the cannabis industry still faces significant obstacles. The climate for investors and cannabis companies in 2023 will be turbulent and rapidly changing as a result of these factors. Choosing which of the numerous startups, IPOs, and established cannabis companies can weather the storm and prosper over the long run will be a major problem for investors.
