10 Cannabis Industry Trends Driving Growth and Innovation

While cannabis industry trends are ever-changing, there are ways to ensure your cannabis business performs with agility.

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    Beneath the haze of change and innovation, the cannabis industry is flourishing like never before. Fueled by a surge in legislation and growing social acceptance, this sector is an unstoppable force, ripe with potential for entrepreneurs, investors, and policymakers alike.

    In this article, we delve into the top ten cannabis industry trends that are driving its rapid expansion in 2023 and beyond. From the emergence of exciting new product categories and the fusion of cutting-edge technology with traditional cultivation techniques to the promise of new policy breakthroughs, this year promises to be an exciting one for the cannabis industry.

    1. New Cannabis Products

    The ever-changing cannabis landscape has led to a shift in consumer demands, with a significant focus on new product categories. While the cannabis flower remains the market’s primary force, the COVID-19 pandemic has popularized non-inhalation products, such as edibles. This new product category is driven by concerns over respiratory health and the need to alleviate stress in uncertain times.

    Additionally, cannabis beverages, vapes, and pre-rolls have seen a boost in sales in younger generations more hesitant to engage in riskier behavior like sharing a joint. As we move into 2023, expect a continued push for innovation and diversity in cannabis product offerings, driven by the expanding array of cannabis-infused products tailored to the preferences of a rapidly evolving consumer base.

    2. Improved Cannabis Cultivation and Distribution Technology

    Cannabis plants require careful controls to ensure a successful crop yield. And in the next few years, we will see cannabis industry trends turn toward fine-tuning cultivation and distribution technology. While some tech concepts, like crop steering, aren’t new in the cannabis market (or the larger agricultural industry), we are seeing new improvements year after year.

    With rising demand for advanced cannabis production technology, we’ll see expanded techniques to help growers optimize their resources. Growers want to strike the ideal balance between electrical conductivity (EC), water content (WC), humidity, and CO2 levels, propelling crop steering to the forefront of cannabis cultivation priorities.

    As cannabis legalization grows, cultivators are embracing new distribution methods to safeguard their operational costs. ERP applications, which integrate seamlessly with state systems, will help transform the way growers track their cannabis products, from seed to sale.

    3. Emerging Sustainable and Eco-Friendly Cannabis Practices

    As the cannabis industry flourishes, so does its impact on the environment. Faced with labor-intensive cultivation processes and resource-intensive business operations, cannabis industry trends are pointing towards sustainable and eco-friendly practices.

    As the world becomes increasingly conscious of the need to reduce carbon emissions, the cannabis sector faces mounting pressure to address concerns over its strain on the electric grid, product waste, and energy inefficiencies. Although current efforts in sustainability are in the beginning stages, the industry is poised to embrace innovation like never before.

    Companies will begin to meet the challenges of a greener future by determining how to minimize their carbon footprints, increase recycling programs for plastic-based products (vapes), and improve cultivation practices to reduce emissions overall.

    4. Cannabis Tourism

    Cannabis tourism is rapidly emerging as a prominent contender in sustainable travel, attracting adventure-seekers and connoisseurs alike. Luxurious retreats have sprung up in recent years, providing exclusive accommodations, top-notch concierge services, and curated weekend itineraries filled with good food, drinks, and immersive cannabis-tasting tours.

    The appeal of cannabis tourism is on the rise, with Forbes declaring the industry a $17 billion operation. As pandemic-weary Americans find renewed excitement for travel, we can expect this cannabis industry trend to take center stage in countless travel plans for the foreseeable future.

    5. Craft and Boutique Cannabis Brands

    Cannabis cultivators are taking notes from their cousins in the hops industry by leaning into the craft branding model. For consumers who want more out of their cannabis company, craft or boutique brands are meeting the demand for higher quality and unique experiences.

    Educated cannabis consumers can expect cannabis producers to meet their demands with artisan products that combine science-backed experiences with those that transcend the typical narrative. While there is still much to learn from the craft beer industry, craft cannabis brands will begin to stand out in the next few years.

    6. Celebrity Cannabis Engagement

    As cannabis legalization sweeps across 37 states (medical and recreational use), many celebrities and mainstream companies have been eager to capitalize on their star power. Celebrities like Snoop Dogg and Jay-Z have joined the cannabis crusade, launching branded proprietary products in hopes of harnessing this cannabis industry trend.

    However, their fame has not shielded them from the discerning eye of cannabis connoisseurs. Consumers demand transparency, seeking to uncover the actual extent of a celebrity’s involvement in the cultivation process.

    Regardless of this increased scrutiny, we can expect more celebrities to jump on the cannabis cultivation bandwagon.

    7. Cannabis Employment Growth

    As the world emerges from the shadows of the pandemic, job opportunities in the cannabis industry will continue to rise. The cannabis market, like many other industries, is eager to recoup lost labor to match increasing production demands.

    A recent report showed cannabis companies created more than 100,000 new jobs between 2021 and 2022, an increase of 33% in just one year. While other industries, like finance and healthcare, will see modest growth, this hiring boon will continue to be among the most important cannabis industry trends in 2023 and beyond.

    8. Social Justice and Equity in Cannabis Policy & Practice

    In the pursuit of social justice and equity, policymakers and advocates are hoping to bridge the gaps within the cannabis industry. While the cannabis industry has seen a boon in job and investment opportunities, not every community has seen positive effects.

    We are seeing this cannabis industry trend in different US communities, most notably the Black American community, where a study found only 2% of all cannabis companies are owned or co-owned by Black Americans.

    To address this inequality, organizations are joining forces with policymakers to create social equity laws that welcome those affected by past cannabis prohibition and discrimination. As momentum builds in this area, we will see more efforts to expunge past cannabis criminal records, eliminate unnecessary licensing barriers, more equitable appropriation of cannabis tax revenue, and robust educational campaigns to train a diverse workforce and reduce stigma.

    9. Cannabis Investment Opportunities

    Despite Congress’s failure to pass the SAFE Banking Act in 2022, market forecasts expect the cannabis market share to expand at a 14.2% Compound Annual Growth Rate (CAGR) from 2023 to 2030. This type of market growth is ripe for investing, especially for investors willing to risk in the short term for long-term benefits.

    Because of the lack of outside investment, new companies and partnerships between industry heavy hitters will emerge. Expect key players seeking to compete more strongly in the cannabis market to turn to traditional merger and acquisition (M&A) techniques to streamline their operations while expanding their market footprint.

    10. Federal and State Cannabis Policy Opportunities

    As public support for marijuana legalization soars, with nearly 90% of U.S. adults in favor, policymakers face mounting pressure to address legal cannabis consumption.

    Momentum at the federal level has been fueled by the enactment of the Medical Marijuana and Cannabidiol Research Expansion Act (H.R. 8454), which the House of Representatives passed at the tail-end of 2022. The law simplifies the research and development process of CBD-based FDA-approved drugs. While this strictly moves the needle forward for the legalization of medical marijuana, thirteen state legislatures are currently debating adult-use recreational cannabis legalization.

    The future of cannabis policy remains uncertain, but the trend toward federal legalization is undeniably gaining traction.

    Final Thoughts

    While cannabis industry trends are as ever-changing as the industry itself, there are ways to ensure your cannabis business performs with agility.

    Velosio offers hands-on guidance and helps clients transform cannabis operations through the cloud, AI, and other next-gen tech. Our team of cannabis experts can guide you through innovative cultivation and distribution technologies, sustainable practices, and regulatory compliance. Contact us to learn more about our SilverLeaf and Dynamics 365 ERP solutions.

    The Right Time for Technology and Your Cannabis Operation