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Cannabis Industry: The Next Booming Industry To Invest In 2020

Avatar by Anne Carton Tweet - in Cannabis - [wtr-time]

Cannabis Industry

Cannabis is one of the herbs that is gaining popularity at a fast rate. The plant is attracting significant attention from researchers, manufacturers, and investors. However, the marijuana plant is made up of several compounds. But, out of all the marijuana elements, CBD (Cannabidiol) is at the center of interest.

CBD is the second most dominant cannabinoid in the plant. It is a molecule that offers several health benefits to users without causing any intoxications. Although there is still a need for lots of research to prove its effectiveness in humans, anecdotal evidence shows that CBD is useful for treating illnesses and discomfort of all kinds.

And, talking about the overall Cannabis Industry, over the past years, it has shown a massive growth of more than 30% YoY and is projected to reach $20.2 billion by 2021. This has resulted in several changes in branding, designing and positioning approaches for all sorts of Cannabis products. It’s been remarkable watching the speed at which visual trends are blooming and rising to the full-scale adoption.

If you are thinking to start a cannabis business or want to invest in the flourishing Cannabis market and enter the list of the best Cannabis brands in the future, then lots of questions might be running across your mind. Here are some of the interesting things that you should know about the plant and the industry that will help you to make better decisions.

CBD And Its Legality Status

As an investor, it is important to understand the regulatory environment of CBD. The Farm Bill recently legalized the use and distribution of industrial hemp. Industrial hemp refers to cannabis with low levels of tetrahydrocannabinol or THC, which is below 0.3% of the plant weight.

THC is the cannabidiol that has psychoactive elements giving the high sensation. Although products containing other cannabidiol are still under strict regulations, the move is an advantage for CBD business.

Cannabis Business

Signing the bill made the production of industrial hemp and hemp-derived CBD with no traces of THC legal across the US. The law allows US manufacturers to offer CBD infused oil and topical, and other products. It also paves the way for retailers to distribute CBD products unlike before when only licensed dispensaries could do that.

However, even with the passage of the Farm Bill, not all CBD products are yet legal. The bill only removes the CBD and other hemp-derived products from the drug enforcement administration’s Schedule 1 under the Controlled Substances Act.

Furthermore, cannabis is yet to be legal federally. But, up to 33 states legalized the use of cannabis for medical purposes, and out of the 33, 10 states legalized its use for recreational purposes. More states may legalize cannabis, and it may also be legal federally soon.

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The History Of The Cannabis Industry

An overview of the booming CBD industry won’t be complete without looking at how it started. The use of cannabis by different cultures for medicinal purposes dates back thousands of years.

However, until recently, you could not walk into a Cannabis store and buy Hemp-derived products like CBD. The federal laws banning the use of marijuana in the US came into force in 1937 under the Marihuana Tax Act.

History of Cannabis Industry

Although the use of cannabis for medical and recreational purposes began many years ago, this century is witnessing turn in the plant’s history and legality. Things are shifting from its prohibition in the 1930s to slow legalization across various states in the US. Today, legalizations are growing in favor of cannabis as a legitimate option of treating patients with a variety of medical problems.

The acceptance of Cannabis and its popularity comes from CBD. CBD lacks the psychoactive properties, which makes it a suitable ingredient in oral sprays, oils, pills, creams, and edibles such as candies and gummies. It is because CBD offers relief from anxiety, pain, and depression.

Studies also show that it can help patients with cancer. Those wanting to try their hands on Cannabis can get the best products at CBDfx, which offers a plethora of products ranging from edibles to vape.

Cannabis Market Stability

Judging by the recent events in the cannabis industry, the Cannabis industry is on an explosively upward trend. The number of places offering cannabis is soaring, ranging from licensed dispensaries, pharmaceuticals to general market retail, including pharmacies, grocery stores, smoke shops, cafes, and gas stations.

Topical Cannabis products no longer make just a small segment of the market as it has been traditionally. Large drug stores and chains of grocery stores are now selling the products. Furthermore, Cannabis products are also available online, which makes it seems Cannabis is available everywhere.

Cannabis Market Stability

If you are planning to invest in the Cannabis industry, then now is the time because CBD is enjoying a safer bet moment, unlike other cannabis products. Google’s recently released 2018 trend search list has ‘CBD gummies’ at the 3rd position in the US under the Food category. Another key indicator of the growing Cannabis market is the move by large companies to acquire stakes in cannabis companies.

Projections anticipate the CBD market to grow from the $390 million-dollar mark in 2018 to around $1.3 billion markets by the year 2022. Although bumpy regulations can arise in the future, the momentum is far greater.

The cannabis industry’s potential, coupled with high demand, is responsible for the industry’s explosion. The future is promising as the legality status of the plant is quickly shifting from illegal to legal in the US and other countries as well.

Attractive High Profits

One of the ways to partake in the booming Cannabis industry is investing in it. But first, finding out the margins is crucial. Fortunately, the sales growth of the CBD market is attractive, and the margins are enticing, as well.

Besides, products containing CBD products like vapes, topicals, capsules, beverages, enjoy higher prices because consumers are ready to pay more for the health benefits that they give.

Attractive High Profits

For starters, although cannabis is legal for medical purposes only in more than half of the US, things are changing in favor of cannabis. The use of marijuana products in the US is also fast rising.

According to statistics, proceeds from marijuana sales in North America increased by 30%, and the sales in North America grew by a massive 30 percent and may reach $20.2 billion by 2021.

Considering that the industry is still in its early stages, that estimates are good news to investors. In short, the marijuana business is booming, and there is a strong potential for investors to make huge profits as the market continues to grow exponentially.

It’s An Enormous Market Opportunity

As things stand, marijuana ranks high among the fastest growing industries. Between 2014 and 2018, registered marijuana sales across the world have tripled. This makes it one of the few industries that offer great long-term potential. The sales projections of the marijuana industry round up to about $166 billion.

High sales figures and estimates are what make every investor consider this opportunity. Apart from the registered sales, marijuana products worth billions of dollars are sold annually through the black market. The increasing cannabis legalization may be able to move these sales to the legal channel. If this happens, then the projections are achievable.

Cannabis Industry Investment Options

To many people, the cannabis industry is made up of two groups; dispensaries who do the sales and the cultivators who grow the plant. This is not the case since the industry affects other industries, including pharmaceuticals, food and beverage, and cosmetics.

There are also value-added producers making products such as concentrates and edibles, labs focused on product testing, industry-specific data platforms, and marijuana industry professionals from marketers to attorneys.

Cannabis Industry Investment Options

The cannabis industry is divided into two parts, ancillary and plant-touching. Plant-touching businesses are businesses with everything to do with the cannabis plants, from growing like offering marijuana seeds for sale, distributing, processing to selling.

It is the kind of business that comes directly to your mind when you think of the cannabis industry. To invest in these businesses, you must navigate all the licensing requirements.

The ancillary business includes marijuana-related companies that deal with the growth, processing, and sale of marijuana products. They include ag-tech companies, data platforms, payment processors, accountant, attorneys, digital markets, and more. Although they are not directly affected by the strict marijuana regulations, they are still subject to regulations.

Professional Branding By Cannabis Businesses

Branding & Design, as a concept are much more than eye-catching packaging, clever advertising or even great products. In today’s maturing cannabis market, where mergers, acquisitions, and partnerships are rolling on the uptick, creating a memorable brand design has become essential for surviving the competition. Thousands of cannabis businesses clients are paying for innovative branding to feel derivative in the cannabis industry.

Cannabis is an industry that contains lots of passion and enthusiasm which is sufficient enough to create a memorable brand. As per the report (The Evolution of Branding in Cannabis Industry by Designhill), in the early months of the year 2012, existing cannabis business partners were interested to spend an average of $200 for all the designs for their brand’s promotion.

With legalization and the increasing demand, the businesses started to focus on various forms of branding and have got interested in paying sustainable spend for the authentic designs. Though, the study is expected to see the use of creative and innovative designs for recreational products and wellness products.

Personal Branding

Case Study By Desighill

Stardust Botanicals, one of the largest cannabis extractors used bold but playful colors on their cannabis logo and packaging which may be more resonant when compared to recreational consumers. They were looking for the aesthetic but modern design with a little retro touch.

The package needed to be half-transparent, another half with uplifting colors. The idea was to make its customers feel uplifted and euphoric while purchasing the product.

Drew Wolfson, the founder of Stardust Botanicals, paid $899 for the packaging design to meet all his requirements. Such a cannabis design inspiration can be used for medical and recreational purposes, but the packaging and branding may resonate differently between the two types.

By 2019, businesses felt an utter need to fix the requirement of professional designing and branding, which overall led to increasing the average spend from $200 to $850. In short, the Average Spend on Professional Branding & Graphic Design by Cannabis Businesses has led to an increase of 4.25 times since 2014.

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Conclusion

So, when deciding to invest in the cannabis industry, you need to choose between the ancillary and plant-touching. If you are yet to decide, then you should take your time as you think through this stage by doing research and consulting experts. Tips and information from experts will give you a good blueprint that you can use as you start. Avoid making hasty decisions that may cost you. For instance, if you want to open a dispensary, you need to understand the rules involved, its capital requirements, and the licensing process.

The Cannabis market enjoys an enormous market potential, and investing in this industry may be a safe bet. However, you need to invest wisely because it’s an industry that is still maturing. This means that you don’t put all your life savings into it.

Consulting experts, especially those who are in the business, is one of the ways that can help you to avoid mistakes. It is also crucial that you invest lots of time in doing your research before making any decisions.

There are several opportunities in the cannabis industry, and it’s a perfect time for you to participate. If you have a solid idea, entrepreneurial qualities, and are willing to play by the rules, then you have high chances of succeeding.

But if you are not yet ready, you can still benefit from the booming Cannabis Industry. Cannabis has many health benefits that can help in managing various illnesses.

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Anne Carton is a small business consultant, designer and an enthusiast blogger working with Designhill, one of the fastest-growing custom design marketplace. She has authored several blogs, articles and editorials on various topics related to interactive content, concerning design, social media strategies, growth hack strategies, digital marketing and e-commerce.

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