With each passing year, the cannabis industry grows larger, as does the number of customers. This trend isn’t changing any time soon. So, to keep you ahead of the curve, we wanted to focus on the top trends the cannabis industry will expect to see more of in 2022. As always, drop us a line if we missed anything!
GROWTH, GROWTH, GROWTH!
It’s likely that all organizations will see consistent growth across all sectors. Brands have been learning how to work with partners in other states which will help accelerate growth this year. Product lines will also continue to expand especially with edibles and tinctures.
Tinctures are poised for huge growth in 2022! They make it easy to consume the health-boosting properties in plants – without needing to smoke, vape, or even eat them. CBD tinctures are among the most popular, available in serums, lotions, chapsticks, lubricants, and more.
LOWER CANNABIS TAX
Cannabis companies are taxed. A lot. California and Alaska in particular face huge tax issues. In Alaska, growers have to pay an $800 flat rate for cultivation. Most plants in Alaska have a $2000 value, so growers are losing almost half of their sales to taxes, before paying for regular business expenses such as their employees’ wages, utilities, property lease, etc.
In California, the taxes are so bad, many cannabis businesses are worried about an industry collapse. Efforts have been made over the years to improve the legislature, but none have been successful. So, why is it likely they’ll have better success lowering taxes in 2022? Simply because the industry doesn’t have any other option.
MERGERS AND ACQUISITIONS
Throughout 2021 we saw many small cannabis companies merge with other smaller organizations, or be bought up entirely by the giants. It’s likely that this will continue over 2022. Management Service Organizations (MSOs) made plenty of acquisitions over the U.S. last year. For example, in Florida alone, acquisitions in 2021 totaled over $500 million.
If we look at Colorado, one of the most mature markets in the country, you can see the trend of vertically integrated companies snatching up the Mom & Pop stores. That’s why many experts are expecting this to continue in other markets across the country.
CANADIAN GROWERS WILL NEED OUR HELP
Throughout the last couple of years, the Canadian cannabis industry has become fragmented. Much of their market share is trickling south, towards us. This fragmentation is especially interesting because sales across Canada continue to climb. However, reports show that the top 5 cannabis producers represent less than 40% of the Canadian market, down significantly from one year ago when the producers made up for more than half of retail sales.
Additionally, Canadian producers have been making some mistakes and inaccurate assumptions about the industry, its growth, and the profitability of their business. American and other international firms are likely to continue profiting from these mistakes.
THE INDUSTRY’S GROWTH WILL PROVE TO BE RECESSION-PROOF
At this point, it appears that COVID variants aren’t going away. Many industries around the globe have suffered during this – not cannabis though. For many of us, cannabis was as essential as hand sanitizer, and the sales are proof. Statista shows us that in 2019, $7.4 billion was spent on cannabis. That number increased to $11.6 in 2020 and $14.9 in 2021. Predictions for 2022 are at almost $20 billion.
In fact, for the first time since legalization, sales in Nevada reached over one billion dollars. That alone is impressive.
GROWTH IN SOCIAL EQUITY
As more cannabis markets open up in the U.S., it’s likely we’ll see more acceptance and social equity. More insurance plans will continue to cover prescription marijuana, and more employers will understand its medicinal use, continuing to form better guidelines for employees. As for banking, we hope for a friendlier process that will allow for more equitable finding in startups and expansions.
No matter what happens in the cannabis market, Beard Bros is here to share the news with total transparency. For more on compliance law, market action, and what we’ve learned in 2021, check out our news page and social media channels.