Looking for the latest cannabis business trends for 2022? Few sectors move at the pace of the cannabis industry. With each passing year, cannabis businesses report record-breaking growth. Meanwhile, new methods of cultivation, technology, and production have become available. (Let alone the sheer number of strains that come on the market annually.)
It’s hard for businesses to keep up with the latest cannabis business trends.
Even in mature markets, the popularity of various cannabis products can rise and fall – despite an overall increase in sales across all categories. To stay ahead of the curve, you need to know the biggest cannabis business trends to plan for in the coming year.
In this article, we’ll delve into the major cannabis business trends in 2022. We’ll discuss how you can react and what to watch out for in the year ahead. Let’s get started.
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Perhaps the biggest cannabis business trend is in the flower market. According to Headset’s recent report – a data-driven tech business analyzing the cannabis industry – the flower category’s market share declined in the US and Canada throughout 2021.
It’s likely not caused by less purchasing, however. Rather, the sector isn’t experiencing the sudden growth other areas are. With new products becoming available, there’s more choice than ever for cannabis consumers. Though flower cannabis remains dominant, it’s sensible to diversify your product selection into edibles and other consumables.
Nevertheless, the flower market remains the highest-revenue category in North America (it’s just declining in its significance).
There’s no sign of legalization slowing down in the US. With American attitudes continuing to trend towards legalization – a 2021 Gallup poll revealed that 68% of Americans favor legal cannabis – we can expect hold-out states to follow down the well-trodden path of decriminalization, medicalization, and eventual legalization.
There are even some signs of a shift at the Federal level.
The SAFE Banking Act continues to move through the House and Senate. Meaning it’s only a matter of time before legal cannabis banking is the norm, not the exception. Meanwhile, the MORE Act – which would see cannabis descheduled from the Controlled Substances Act – passed the House of Representatives for the second time on April 1, 2022.
Headset also reported on the booming cannabis beverage industry. Year-on-year beverage basket penetration in the US nearly doubled from 2% to 3.7%. It remains even higher in Canada at around 4%.
The overall move towards newer cannabis products is likely to be one of the biggest cannabis stories of the next half-decade – and many multi-million-dollar cannabis brands will be born in the expansion. Expect such brands to become household names in the coming years.
In fact, the industry’s growth is already leading some brands to expand their operations. Once small-time craft businesses are becoming giant companies commanding the sector. DogHouse Cannabis, for example, expanded its operations to Michigan in 2021. It’s a cross-sector trend: the average square footage of cannabis production areas grew from 18,200 sq ft in 2016 to 36,300 sq ft in 2020.
Nor are there any signs of the trend slowing down.
With changing attitudes and more states embracing legalization, the cannabis industry remains in its rampant growth stage. In Washington State alone, sales revenues will reach $1.5 billion in sales – up by $300 million from 2020.
Experts are projecting that industry sales will reach $30 billion in 2022. This cannabis business trend is one of the economic success stories of this century.
But, as noted, the market is also maturing and diversifying. Consumers are no longer just purchasing flower strains. We can expect sub-cultures and habits to develop as new types of products become available – similar to the diverse patterns of consumption seen in the alcohol industry.
California is the biggest consumer of cannabis in the country. That’s not set to change. What will change is how cannabis producers use water. With the state reporting a near record-setting drought, restrictions on water usage will be ever more stringent.
According to New Frontier Data, outdoor growers use the least water compared to indoor facilities: 11 gallons per square foot per year versus 209 gallons.
Taking steps towards water conservation – amongst other efficiency savings – will be a significant push in drought-affected states.
Part of the problem with predicting cannabis business trends is the sheer uncertainty with innovation. No one knows what the next big advance will be. What we do know is the scale of research will continue to rise.
Between 1990 to 1999, fewer than 3,000 papers about cannabis were published. In contrast, 2021 alone saw over 3,800 reports filed. After all, there’s money to be made producing new strains, marketing new cannabinoids, and developing more advanced treatments.
It’s a huge industry change. As stigmas and misconceptions about cannabis continue to shift, more scientists and analysts will venture into cannabis research – they’ll follow the money.
It was always going to happen. Internally, bigger cannabis businesses are buying out their competitors. In addition, external companies see exorbitant profits and want a piece of the action. For example, 2021 saw Jazz Pharmaceutical acquire GW Pharma in a $7.2 billion deal, and Massachusetts-based Curaleaf bought out Arizona-based Bloom Dispensaries for $211 million.
With the industry becoming more competitive, smaller businesses need capital to survive. It’ll fuel increasing merger and acquisition activity throughout 2022. Being underbanked also bolsters the pressure – as there are few avenues for investment aside from selling up.
We’ll likely see big names continue to outpace the rest. Curaleaf now has a portfolio of 121 dispensaries nationwide, for instance.
It’s one cannabis business trend to watch in 2022 and beyond. The cannabis industry is anything but stagnant.
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Do you own a hemp, CBD, dispensary, marijuana, or cannabis business and need a business bank account? We’ve validated over $8 billion dollars in cannabis-related funds since 2015. Bank with confidence. Bank with Safe Harbor Financial today.
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