December 19, 2018
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Last month, the Cannabiz Media team attended MJBizCon 2018 in Las Vegas, Nevada. One of the highlights at the conference was the opening State of the Industry: Developments, Data & Trends by Chris Walsh, Founding Editor and Vice President of Marijuana Business Daily.
During his keynote presentation, Chris covered important developments, trends, and predictions for the marijuana industry. Following are some key points that stood out to me.
Chris touched on a number of developments in the marijuana industry that happened during 2018 such as the challenges with California, Massachusetts, and Canada rollouts and the failed legalization of recreational cannabis in North Dakota (although this wasn’t a surprise).
He also talked about the legalization of recreational cannabis in Michigan, which is estimated to be a $1.4-$1.7 billion market making it the second largest market in the United States. Michigan is the first recreational state in the Midwest, so it remains to be seen if legalization there will have an effect on surrounding states.
Oklahoma, Missouri, and Utah approved medical marijuana in 2018, and Chris sees legalization spreading to America’s heartland. The Oklahoma market is expected to reach $100-$150 million. Missouri’s medical marijuana market is forecasted to reach $175-$276 million, and Utah’s market is predicted to hit $15-$25 million. Chris also discussed a growing trend in the heartland with legislatures trying to get ahead of voters. This is definitely an area to watch.
Last year, Chris talked about outside money coming into the marijuana industry in 2018, and it happened. In his presentation this year, he highlighted the $4 billion investment by Constellation Brands that happened in 2018 as well as big raises by Curaleaf ($400 million), Acreage Holdings ($119 million), MedMen ($110 million), Privateer ($100 million), and Cresco ($100 million). It’s safe to assume these types of large investments will continue in 2019.
Not surprisingly, marijuana sales grew in 2018 (from $5.8-$6.6 billion in 2017 to $7.4-$9.3 billion in 2018) and are projected to continue growing in 2019 (up to $10.7-$13.5 billion). In 2022, Chris reported that marijuana sales are expected to grow to $19.8-$24.3 billion. In other words, the marijuana market will grow by nearly 3-times in the next four years.
Chris highlighted program delays in most new states, including Louisiana, North Dakota, Arkansas, Maine, Ohio, West Virginia, and California. However, we’ve seen this playbook before. License losers in competitive states wage law suits and sometimes secure licenses, or the state is “overwhelmed” with licenses because they have to wade through thousands of pages of applications. In other words, delays are not unusual.
On a positive note, the industry saw a number of multi-state operators expanding during 2018. This is a fascinating trend that we see all the time in the Cannabiz Media License Database as companies land in new markets. For example, GR Vending received a license in Connecticut and has applied for one in New Jersey. They are part of GrassRoots in Chicago, Illinois and show up in many other states as well. Chris sees these expanding multi-state operators continuing to buy and partner to get into new markets.
Canada and international markets were at the center of significant trends in 2018. For example, there was a vast increase in the number of US marijuana companies going public in Canada (some Canadian companies are trading on Nasdaq/NYSE). The industry is growing internationally and is sometimes fueled by the access to capital that Canadian markets enjoy. They’re making investments in places like Columbia with a more fertile growing environment than Canada.
At the same time, hemp production is soaring.
To wrap up his presentation, Chris offered five predictions for the marijuana industry in 2019:
I think Chris’ predictions are pretty solid. We’re already starting to see mainstream companies becoming more active in the marijuana space, and New York’s Governer Cuomo has made the news this week saying marijuana legalization in New York is one of his priorities, and he hopes it will happen within months.
One prediction we can all agree on is this – 2019 will be another eventful year for our industry. Cannabiz Media will be tracking all of the marijuana license activity in the Cannabiz Media License Database.
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