January 10, 2023
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What’s coming for the cannabis industry in 2023? As always, change will be common throughout the next 12 months. Sales are still holding on but businesses are struggling. Change is needed – and soon!
With that said, let’s take a look at six ways the cannabis industry could change in 2023 – for the better and worse.
In 2022, the SAFE Banking Act was so close to crossing the finish line, but again, it failed. There is no doubt that efforts to push through banking reform as well as legalization will continue this year, but with prices plummeting and market saturation continuing to be a problem, momentum will slow down.
Cannabis is the hurry up and wait industry, and we’ll need to rebuild momentum to enact must-needed changes in 2023. Shifting power structures in Washington, D.C. could have a negative impact on forward progress for the industry, so persistence will be the name of the game during the next 12 months.
Mergers and acquisitions have been hot topics in the cannabis industry during the past few years, and that won’t stop in 2023. However, we’re also likely to see more consolidation among smaller players in the industry in an effort to leverage economies of scale.
Small mom and pop businesses that can’t make it on their own may look for opportunities to be purchased by single state operators (SSOs) or regional players that want to expand their footprints.
News reports say new FDA rules are coming for CBD and Delta 8 products, which could have a significant effect on the businesses that make and sell them. It’s possible the rules will help the legal cannabis industry by lessening competition, but that’s not guaranteed.
For example, businesses that can’t afford to follow newly established regulations will need to close up shop, and we’re likely to see fewer CBD and Delta 8 brands a year from now. We’ll have to wait and see exactly how those changes affect the cannabis industry in 2023 and beyond.
It’s possible that states will realize their exorbitant taxes and rules that prevent business rather than promoting it are helping the illicit market and hurting the legal cannabis industry.
Could a decrease in taxes and other compliance and regulation changes allow businesses operating in the legal cannabis industry to pull customers from the illicit market to the legal market? Probably. It remains to be seen if 2023 will be the year that regulators reduce the monetary and other burdens imposed on cannabis businesses. Fingers crossed!
States are finally awarding consumption lounge licenses and locations are opening. In Episode #46 of Cannabiz Media’s Cannacurio Podcast, Jason Kikel, Director of Regulatory Research for Cannabiz Media, said it’s likely Nevada will become the national consumption license leader with Las Vegas opening “Vegas experience” lounges.
In addition, Jason predicts Chicago could emerge as a national leader since Illinois is building the groundwork for an excellent regulatory environment. Denver is another city to watch.
Furthermore, California is finally showing some movement. During the podcast, Jason shared that local governments are allowed to innovate lounges, and West Hollywood has already done so with a variety of lounges and experiences available.
On the East coast, Jason expects New York to follow in Las Vegas’ footsteps and start opening consumption lounges quickly. This year is just the beginning for consumption lounges across the country.
The cannabis industry will continue to struggle in 2023, so we’re likely to see a lot more businesses across the value chain implementing cost-cutting measures. Changes could include building efficiencies into processes, prioritizing a lean operations strategy, and even laying off employees or reducing hiring.
In simplest terms, 2023 will be a year when winners will rise. The winners will be the businesses that implement effective strategies, have strong and experienced business leadership, and can make the difficult decisions required to not just survive but thrive in the future.
Slower momentum, consolidation, CBD and Delta 8 clarity, rule changes, consumption lounges, and cost-cutting are just some of the things that will define the cannabis industry in 2023. Of course, nothing is set in stone, so we’ll need to wait and see. Remember, this is the hurry up and wait industry.
To keep track of business licenses and changes across the value chain in the United States and international markets in 2023, subscribe to the Cannabiz Media License Database. Schedule a demo to see how you can use it to reach your goals this year.
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