Legalized Pot: Opportunity Knocks for Savvy Industries
In the not-so-distant past, anyone who wanted to partake of marijuana in any form risked running afoul of state laws, but that’s rapidly changing despite continued federal prohibition, which is unlikely to change under the Trump administration. Today 30 states and D.C. have some form of legalized medical marijuana, and 15 more are considering legalization for medicinal use even in children with appropriate treatable medical conditions. However, some states have gone further.
Legalized Recreational Cannabis: Its Impact on the Economy
Of those states with medical legalization, 10 states have also legalized recreational use, leaving only five states that still follow the federal prohibition guidelines despite public opinion, which indicates that 61% of Americans approve of legalization in some form. And that’s good news, not only for marijuana suppliers and growers but also for enterprises that offer related products or services, such as security. A recent report by Arcview Market Research and BDS Analytics estimates that, overall, the legal marijuana industry will have a $40 billion impact on the economy by 2021.
An Expanding Marketplace
The introduction of recreational sales represents a windfall for cash-strapped states in terms of tax revenues, jobs, and reduced law enforcement costs, but states are not the only beneficiaries. There is huge potential for the introduction of all sorts of food, beverage, and topical products with a cannabis component, but the opportunities don’t stop with consumables. If they’re savvy, all sorts of ancillary industries can benefit: growers, packagers, and equipment manufacturers are on this list.
Growers in pot-legal states typically grow their plants indoors or in greenhouses. This practice accrues to the benefit of realtors who rent/sell space, manufacturers of lighting equipment, providers of water and water-filtration products, and those who supply building automation to regulate the growing conditions.
Diverse Uses of Cannabis in Other Products
Seldom does one see a single product used in so many different ways. In the case of cannabis-added products, people can smoke them, drink them, eat them, or rub them on their skins. Each category requires a different type of packaging, and within each category, there may be more than one option, e.g., beer can be canned, bottled, or kegged. Wine can come in a bottle or a box. Food can be dried, frozen, or fresh.
Agriculture Products and Growing Solutions
Besides consumables and topical products, other pot-including products are reaching the marketplace rapidly, and some owe their existence to the development of pot-based fertilizer. Pot-based fertilizer is important for growers to use to prevent the negative effects of ordinary fertilizer, and considerable scientific research and testing has gone into its development. Appropriate growing solutions are now available too. These additions will enable marijuana growers to provide a more-robust product.
Other industries that can – and many already do – benefit from cannabis legalization include transportation that moves products to processors and from processors to dispensaries and ultimately to consumers, or in the case of foods and beverages, to bars, restaurants, and stores that sell cannabis-containing products. This area too is expected to expand as other states hop on the legalized-cannabis bandwagon.
Because of the nature of the products, security plays an important role in ensuring their safety and the safety of the buyers/sellers as well. Security firms are hard at work to provide security automation to leverage cutting-edge security solutions that provide safe work environments and reduce operational overhead.
The needs of growers and processors will change as time goes on and new products/processes come on the scene. Undoubtedly, equipment will need upgrading as the market expands and refines. New capabilities may call for new approaches.
Because cannabis is involved, product growers/developers will need to be vigilant in hiring workers/staff, even in states where the products are legal, but especially in states that are close or contiguous to non-legal states. Background checks will be helpful, but penalties should be severe for workers/employees who cross state lines to sell products in non-legal states. Track-and-trace software can be useful for this purpose.
Almost anyone with almost anything to sell has a digital presence today, but not purveyors of pot-containing products, even in states where recreational marijuana is legal. So it is left to blogs and other “personal” accounts to carry any message regarding legal pot-containing products. When questioned, the majority of site owners report that only federal approval would lift their ban.
An Increasingly Competitive Landscape
In states where recreational cannabis is legal, it’s a market on steroids. Legalized pot could possibly be the leading cash crop in the U.S. within the next 20 years, and competition is fierce to be among the leaders of the pack. Competitors are very aggressive in their strategies for seeking new markets, and they’re not wasting time. Many are already developing plans or testing concepts to launch in the coming 12 months. There will be winners, and there will be losers. Those who win will be those who have prepared well and have developed the most effective marketing and competitive-entry strategies.
Where to Turn for Help
Proactive Worldwide (PWW) is in business to help enterprises achieve their goals. In this case, that means taking a sizeable chunk of a $40B jackpot. Our researchers and analysts can help develop innovative market-entry strategies that adapt to the competitive and regulatory challenges ahead. We focus on crafting business strategies that succeed.
About Proactive Worldwide, Inc.
Proactive Worldwide, Inc. is a global research and strategic intelligence consulting firm that provides evidence-based, constructive information within the competitive-intelligence, market-intelligence, and customer-insights domains. Anchored by primary-source research for over 22 years, PWW’s multilingual professionals assist clients with offerings that include – but are not limited to – market intelligence and competitive research services, market-entry and defense strategies, war-gaming workshops and scenario- planning events, and customer-experience and voice-of-customer studies. To learn more, visit http://www.proactiveworldwide.com.