In April 2023, Congress passed the historic U.S. Cannabis Legalization Act, ending decades of prohibition and fundamentally transforming the cannabis industry in America. The law removes cannabis from the Controlled Substances Act, allowing states to create their own regulatory frameworks for legal recreational and medical marijuana businesses, and paving the way for the federal government to issue licenses for regulated cannabis production. The passage of this bill has already caused a flurry of activity, with new businesses popping up across the country, investments pouring into the industry, and increased interest in cannabis-related jobs. It is expected to bring billions of dollars in revenue and generate thousands of jobs.
The percentage of young adults who smoke cannabis has increased according to Gallup consistently since 2018. Fortunately, those in the same demographic who smoke cigarettes has decreased and has reached an all time low over the past four years. Although technically there isn’t a connection between increased cannabis consumption and decreased tobacco, for health reasons, it’s encouraging to see that less are smoking tobacco.
As we move further into 2023, the biggest news we will see in the cannabis industry is the continued segmentation in the market in reference to purchasing. Flower is still popular, but as the industry continues to grow, other cannabis products are gaining significant market share at a steady rate. Cannabis products such as new concentrates, edibles and vapes are gaining in popularity. This will cause major changes in the industry in everything from types of delivery systems to packaging, pushing new technological development. In 2023, the biggest news in the cannabis industry will continue to be the segmentation in the market, and the greater gain of market share of new products.
Although marijuana remains illegal on a federal level in the US, Maryland and Missouri approved laws in support of cannabis for adult use back in November 2022. Some US states, including Minnesota, Ohio, Hawaii, Oklahoma, etc., are debating whether to legalize marijuana for recreational use starting in 2023. Two significant developments in 2022 are likely to propel the US closer to full legalization of cannabis in 2023: the House adopting a measure decriminalizing marijuana in April and the Senate's subsequent introduction of the Cannabis Administration and Opportunity Act.
This year, Hong Kong has made headlines in the cannabis industry with a new law criminalizing CBD products. Penalties for possession and/or production of CBD can range from hefty fines to jail time, causing shockwaves among global markets as Hong Kong is an influential economic player. Companies pursuing legal pathways to import and market hemp-derived products have been forced to reconsider their strategies, given Hong Kong’s newfound unlawfulness of producers and distributors. All eyes are on Hong Kong, especially Australian companies that were hoping to expand the booming medical marijuana trade by tapping into Hong Kong's rich potential. With millions of dollars at stake and many entrepreneurs poised to take profit from the move, it looks like there has yet to be a clear resolution on this issue in the industry.
Twitter allowing cannabis ads on their platform is one small step for cannabis on social media and one giant step for the future outlook of cannabis brands being accepted on other platforms. I work directly in the cannabis industry and I can tell you first hand that the challenges created by the lack of ability to market where alcohol and other brands can market severely limits a brands reach and hope for creating a true mainstream brand. Elon allowing cannabis ads will 100% open the door for other platforms to follow suit, since they won;t want to miss out on the opportunities it presents for them either. Once this happens, it opens up a whole new world for cannabis brands and marketers to build something that lasts.
With legalization came increased funding for research into the effects of cannabis on both physical and mental health conditions. In the past three years, more than 70 studies have been conducted on various aspects of cannabis use and its effects on health. This research has opened up new possibilities for medical uses of marijuana and shed light on the plant's potential therapeutic benefits.
Despite tremendous advancements in the industry, particularly in terms of legality, there are still significant obstacles ahead. Cannabis businesses, like any new industry, must raise funds to continue their expansion. Cannabis industries do not have the same easy access to banking services that many other businesses do because of their shaky legal status. This raises the difficulty and expense of raising finance. However, the Federal Reserve's recent rate rises may make it more challenging for cannabis companies to raise money for future expansion.
The biggest news to hit the cannabis industry in 2023 is the legalization of recreational marijuana use in the United States. This monumental decision has allowed for the development of a regulated cannabis market and has opened the door for new business opportunities. The industry has seen a surge in investment and growth since the announcement, with more states expected to follow suit in the near future.
Legal marijuana sales have begun in New York, making it a revolutionary year for the cannabis industry. Legalizing sales of the substance marks a significant step forward in understanding and recognizing its value as an important part of healthcare and the medical industry. The launch has been welcomed by those who are passionate about cannabis, recognize its therapeutic benefits, and desire equal access to products. Consumers now have many more options when it comes to choosing the product that is best suited to their needs. Although it is still early days, this monumental switch continues to bring much-needed positivity and growth to the cannabis market.