By Brad Weissberg/Nov. 19, 2017
REPORTING FROM LAS VEGAS —The largest business-to-business cannabis-centric convention was held in Las Vegas Convention Center, Nov. 14-17. Over 18,000 people attended and over 650 exhibitors showed off their products and services.
Chris Walsh, founding editor of the Marijuana Business Daily, gave a rousing keynote address where he spoke about highlights from the year and trends in the cannabis industry so far this year, presented statistics and whipped out his crystal ball to boldly make predictions about 2017 industry developments.
The biggest development, according to Walsh, is that the polls show 64 percent of people believe cannabis should be legalized. “This up from 29 percent just six years ago,” he said. Also up are poll numbers from Independents and Republicans. “This is a reflection of how the industry is operating today.”
Top of the list of developments are the passing of a medical cannabis bill in West Virginia and the big news that New Jersey is on track to going full out on legal adult-use.
The New Jersey market itself has nine million people as potential customers but the real implications are staggering. If the state indeed goes legal, it will attract business from New York, Connecticut and Pennsylvania, where it is not. This makes New Jersey a potential $1 billion market, the largest market ever.
Positive news also came out of Detroit after the recent elections, Walsh explained, in the form of relaxed zoning and regulatory laws.
Rhode Island and Michigan are exploring legalizing recreational; Ohio, Pennsylvania, Maryland, Hawaii and even Texas are rolling medical use and sales. “This is despite federal uncertainty,” he said.
A chart showing cannabis sales projections from 2016 through 2021, presented by Chris Walsh, MBJ Daily, at their conference held this year in Las Vegas. Figures showed up to $17 billion in cannabis-related revenue by 2021.
In states that have fully legalized an astounding 70 percent of the customers come in from the recreational side. “Sales in on the medical side are declining in states where recreational exists,” said Walsh.
Trends in the industry are consolidation and the growing amount of consolidation in the industry; “Big Business mentality creeping in”; and what may be the biggest trend— and concern— the invasion of the business by money-hungry corporations.“Get ready for the big players to start showing up,” said Walsh, who also thinks “growing could get tough.”
The investment level in cannabis businesses is exploding. “Years ago we would get excited by a three million investment, now we’re seeing 30 million investments,” said Walsh. “And that’s about to be dwarfed by a new fund that will invest $250 million in the cannabis space.”
In what has been highly expected and feared, the first outside-the-industry player has emerged. U.S. drink maker Constellation Brands has made a 10 percent investment in a Canopy Growth Corporation, the world’s largest publicly traded cannabis company.
Netflix also gave a big thumbs up to the industry by producing a cannabis-friendly show, “Disjointed” for it’s platform and partnering with a California dispensary to brand a strain in it’s name.
Another trend is the expansion of companies currently operating in one state moving into other states. “Edibles and concentrate makers are practically making headwind into branching out.”
Chain stores are starting to develop in mature states like Colorado and Washington. “It’s like McDonald or Starbucks, you know what you are going to get,” he said. “The floodgates are opening; be prepared,” cautioned Walsh.
Alarming to Walsh is the emergence of other countries, particularly Canada, which will go legal across the entire country and permitted on a federal level; and Israel, where the ban on scientific research has been lifted. “Canada is going to be the first country in the world to export cannabis and Israel is leading the way in advancing scientific research,” said Walsh. “Because of the federal laws America is falling behind.”
Walsh was pleased that so far the threats that the Trump-government would interfere with the “hands-off” policy set up in states that have legalized for medial or recreational under the Obama administration have not materialized and that a bill is before congress which would stop the federal government from doing so no matter what administration is in charge. “There’s a lot of ways this could play out,” said Walsh. “We will have clarity in a few months.”
Wholesale prices are falling; government and regulatory challenges in selling an established business; companies in turmoil; lawsuits over intellectual property and employee rights; and natural disasters are all topics concerning Walsh in the days ahead.
Walsh makes predictions for the upcoming year at the conference every year. This year’s list includes growth slowing to 15 percent in recreational states; the first implosion of a legacy company; more states legalizing medial and recreational use; lawsuits; the hemp industry making great strides; and the Trump administration overt action in some form.
For those keeping score, Walsh was right in 5 out of 5 predictions for the 2016 and 3 out of 5 for last year.