420 FILE - Cannabis legalization has quickly spread across the United States, and perspectives on its use have shifted rapidly.
As such, the future of the cannabis industry looks promising for businesses and consumers. This article touches on the different cannabis market trends you can expect for 2023.
Increased Sales And Continued Legalization
According to a report by Grand View Research, Inc., watchers expect the US cannabis market to reach USD$40 billion in 2030, with a compound annual growth rate of 14.9%. As of November 2022, recreational marijuana use is legal in 21 US states, with some remaining areas looking to decriminalize it or enact a medical marijuana bill.
The report found that the medical end-use segment was responsible for 77.5% of the revenue share in 2021. This is due to the increasing scientific research supporting cannabis’ benefits in treating several chronic diseases. In fact, the CBD segment had a revenue share of 66.3%, a testimony to consumers’ belief in its pain-relieving efficacy.
And with states like California amending its tax laws to help smaller players in the legal market, the cannabis industry should only grow stronger.
Product Innovation To Increase Mainstream Acceptance
Apart from legalization, continued product innovation will be the primary driver of the cannabis industry’s exponential growth. Brands reach non-smokers with edibles and other cannabis-infused products. Some 10 years ago, experts estimated that 80% of all product sales came from flowers. They estimate that number now at 47%.
The continued evolution of products like concentrates, topicals, and beverages has helped destigmatize cannabis. As noted by Curaleaf Executive Vice President of Marketing Kate Lynch, when they released an infused seltzer in Massachusetts, 50% of sales came from those who were completely new to cannabis. One company has even introduced a line of CBD-infused products for dogs. The products are designed to improve joint health, improve demeanor, and enhance general physical and mental well-being.
Besides product innovation, brands are also forging partnerships to make the retail experience more convenient. As highlighted in this informative post, Green Thumb Industries has partnered with Canadian convenience store and gas station Circle K to sell cannabis products at certain locations in 2023. The partnership kicks off in Florida with dispensaries opening in 10 sites adjacent to Circle K stores.
The Emergence Of Other Cannabinoids
Apart from innovating new cannabis products coming in familiar and non-threatening forms, researchers are exploring the effects of other cannabinoid compounds. This exploration has created a trickle-down effect, with breeders looking into creating strains with higher levels of cannabinoids other than tetrahydrocannabinol (THC) and cannabidiol (CBD). These include the following:
- Cannabinol (CBN): Produced as cannabis ages, this compound has strong anti-anxiety and sedative properties.
- Tetrahydrocannabivarin (THCV): Compared to the psychoactive effects of delta 9 THC, THCV produces a more intense but short-lived high. It’s also an appetite suppressant, which might be desirable for a particular market segment.
- Cannabichromene (CBC): Similar to CBD, CBC is non-psychoactive and has a breadth of potential health benefits and medical uses. What makes CBC unique is that it’s present in higher quantities in the plant, making it easier to produce supplements from it.
In addition, researchers are also studying compounds such as CBG, THCA, limonene, and other terpenes. Consumers could start seeing products with the above compounds as early as 2023.
Increased Wellness Messaging
In line with the continued growth of the health and wellness industry, cannabis brands are exploring potentially lucrative opportunities in the wellness space. Brands that initially catered to the medical marijuana segment now amplify their work with researchers to study the efficacy of cannabis compounds on more medical treatments.
So far, CBD has been instrumental in introducing hemp products to the mainstream market and making previously reluctant consumers more comfortable trying alternative medicine. Because of this, CBD products have become a consistent presence in health and wellness aisles across the United States. Brands are looking to build on this familiarity and increasing consumer trust to introduce more cannabis products to the health and wellness space.
As such, expect to see more marketing messages centered on integrating lower-dosed THC products into everyday life.
Similarly, pain management is an area where cannabis enjoys increasing acceptance. With the spotlight on the harmful effects of opioids, more people are looking for other pain management solutions. And while there’s still no conclusive evidence to classify CBD’s pain-relieving properties accurately, most experts agree that the risks and side effects are minimal compared to opioids and anti-inflammatory medicines like ibuprofen.
Celebrity Partnerships To Help Overcome Marketing Challenges
While mainstream acceptance and use have significantly increased over the years, businesses still face various marketing challenges. For example, Meta’s two leading platforms, Facebook and Instagram, still aren’t as friendly to the cannabis industry as business owners hoped. There are also other regulations in traditional advertising that businesses must comply with, making it challenging to achieve optimal reach.
As such, cannabis brands have turned to the clout of celebrities to aid this regard. It’s become commonplace to hear about stars partnering with brands, with many of them even investing in the business. Musicians and athletes are at the forefront of this trend, which should only continue in 2023.
Attaching a celebrity name gives credence to brands in a space with numerous unknown players. In addition, celebrities have personal brands to protect. This means endorsers aren’t just after cashing paychecks; they often dive deep into the product specifics of what they endorse.
One such brand is SōRSE Technology, a CBD and hemp supplier working with celebrities to promote their brand. According to their VP of Sales and Marketing Diana Eberlein, the company’s celebrity partners look into the testing undergone by the products, evaluating their Certificates of Analysis. The extra mile most celebrity partners go to results in consumer trust and, ultimately, brand growth.
Heightened Digital Marketing Efforts
The marketing challenges mentioned make measuring the performance of marketing efforts doubly challenging. For example, signages and billboards are advertising spaces that don’t have regulatory limitations.
However, there’s no accurate way to trace how much these spaces influence consumers, making it hard to quantify ROI. And with increasing data privacy awareness and limitations to digital user tracking, targeted digital marketing will continue to be a challenge in 2023.
One digital marketing area businesses can look to improve is search engine optimization (SEO), particularly local SEO. For cannabis dispensaries, being included in Google’s Local Pack is critical. The local pack is the top three local results shown by Google. Achieving this entails the following:
- Using specific keywords targeting local audiences, such as a specific location on a map
- Citations from other sources
- Website domain authority
Businesses should also optimize their Google My Business profiles. This requires ensuring that the business name, location, and contact details are updated on Google, among other pertinent information for users.
Technological advancements are expected to progress the cannabis industry further in 2023. For example, there are new extraction methods that can increase the potency of cannabinoids in consumer products. More advancements are also being seen in the growing process, with lighting and ventilation systems requiring less energy, emitting less heat, and lasting longer. This results in increased production capacity, reduced costs, and, ultimately, lower consumer prices.
There are also steps being taken to personalize the compound mixture of products. This means consumers can use products made to their exact preferences.
For example, if a customer wants minimal psychoactive effects with all the relaxing properties, they can soon get a genetically engineered tailored strain. There are already plenty of strains in the market as it is. The ability to personalize one will be a game-changer when it comes to fruition.
The cannabis market is as lucrative an industry as there is right now. But despite changing attitudes and increasingly favorable political support, it’s not without its challenges for business owners. But for consumers, it’s a great time to be alive.