Technology affects every part of the cannabis supply chain from big data and cultivation to sales, delivery, and everything in between. As marijuana laws continue to loosen in states across the country, new business opportunities will continue to open. This includes opportunities for new cannabis technology to transform the industry.
The biggest opportunities for cannabis technology this decade focus on three critical areas:
- Solving industry problems
- Meeting consumer needs
- Streamlining business operations and boosting ROI
Current industry problems include a growing focus reducing water, electricity, and plastic waste. In addition, evolving state privacy laws are challenging cannabis businesses, and new technology will be needed to ensure businesses stay in compliance.
At the same time, businesses need to find ways to increase efficiency and improve revenues. Automation and artificial intelligence will play key roles in both. More opportunities for cannabis technology will develop as consumer needs and preferences change. For example, recent trends show that consumers are actively looking for easier ways to buy and grow safe products.
Let’s take a closer look at some of the most significant opportunities that will define cannabis technology opportunities this decade.
Extraction and Delivery Methods
Cannabis consumer preferences are changing as the stigmas associated with marijuana fade and broader audiences become active users. For example, both the senior and female consumer markets for cannabis products are growing, and these consumers have different preferences for how they consume marijuana. As a result, the demand for delivery methods other than smoking, vaping, and dabbing is increasing.
With a growing demand for new delivery methods comes an opportunity to develop cannabis technology that will transform extraction. Nano-encapsulation technology has been a hot topic in the cannabis industry for some time now, and with the skyrocketing popularity of CBD products, developing this technology in order to provide new ways to consume cannabinoids in a safe and consistent manner should be a priority.
Cannabis extraction technology will also play an important part in new product development – particularly for edibles and new forms of delivery– to meet the growing consumer demand for quick onset, predictable dosing.
Automation and Artificial Intelligence
The cash flow problem plaguing many cannabis companies has been in the news for months, and it’s quite possible that technology can help in a variety of ways. Data shows that automation can have a significant effect on a company’s bottom-line. This is true across the supply chain. For example, cultivation automation can decrease manual labor hours by as much as 80% in a grow facility.
Today, cannabis growth can be monitored using automated grow apps. This technology integrates artificial intelligence to improve harvests and reduce costs.
From a sales perspective, artificial intelligence has been built into mobile apps, chatbots, websites, and more. Even cannabis vending machines with built-in artificial intelligence are helping to reduce labor costs at dispensaries while improving customer experiences.
Environment and Sustainability
The environment, sustainability, and water and electricity conservation have long been sources of discussion in the cannabis industry. Fortunately, cannabis technology has solved some of the problems, but there are still opportunities for technology to do more.
For example, using LED lighting at grow facilities has definitely helped reduce some electricity consumption, but there is a significant opportunity for new technology like electricity storage.
Similarly, there have been technological innovations around cannabis product packaging with a number of eco-friendly packaging solutions available today, but the reality is that massive amounts of paper and plastic are wasted across the cannabis supply chain every day. Again, a big opportunity is waiting for a technological solution.
The European Union implemented new privacy regulations in May 2018 called the General Data Protection Regulation (GDPR), and by the end of 2019, the law generated $126 million in fines. Under the new laws, companies that met specific criteria related to doing business in the European Union had to start complying with strict privacy rules. Now, enhanced privacy rules are coming to multiple states in the U.S.
The California Consumer Privacy Act (CCPA) was passed in 2018 and went into effect on January 1, 2020. Enforcement of the new law will begin on July 1, 2020, so companies need to have processes in place to ensure they’re compliant as soon as possible.
CCPA sets strict rules around how companies can use people’s personal information, and it’s expected that more states will follow with their own enhanced privacy laws in the near future. It’s also expected that some of those laws will be even more comprehensive than California’s law.
Companies in the cannabis industry will need technology to help them map customer data, manage third-party relationships, develop compliant tracking processes, and automate those processes. At this point, the opportunity for a technology solution is wide open.
Key Takeaways about Cannabis Technology Coming This Decade
This decade will be filled with new cannabis technology launches. There are certainly problems to solve and needs to fulfill. We’re already seeing technologies from other industries transition into the cannabis industry, and innovative cannabis technology debuts all the time. The best, most agile technology will have the greatest chance to succeed and stay in this industry for the long-term.
Susan Gunelius, Lead Analyst for Cannabiz Media and author of Marijuana Licensing Reference Guide: 2017 Edition, is also President & CEO of KeySplash Creative, Inc., a marketing communications company offering, copywriting, content marketing, email marketing, social media marketing, and strategic branding services. She spent the first half of her 25-year career directing marketing programs for AT&T and HSBC. Today, her clients include household brands like Citigroup, Cox Communications, Intuit, and more as well as small businesses around the world. Susan has written 11 marketing-related books, including the highly popular Content Marketing for Dummies, 30-Minute Social Media Marketing, Kick-ass Copywriting in 10 Easy Steps, The Ultimate Guide to Email Marketing, and she is a popular marketing and branding keynote speaker. She is also a Certified Career Coach and Founder and Editor in Chief of Women on Business, an award-winning blog for business women. Susan holds a B.S. in marketing and an M.B.A in management and strategy.