When discussing the future of the cannabis industry, financing and federal legalization are front and center. Many members of Congress continue fiercely opposing banking reform for the cannabis business. Bipartisan senators are urging the President to support federal legalization in 2023. If so, concrete actions will finally be taken to address these concerns.
In 2023, there may be a recession in the United States, and the economy will still be struggling. Cannabis prices decreased during 2022, and it is anticipated that the oversupply and problems with the black market will persist into 2023. Consequently, in the next year, mergers and acquisitions will continue, if not become more common.
Despite the possibility of fewer large-scale mergers and acquisitions in 2023, there will still be plenty of chances for smaller and mid-sized cannabis businesses to be bought out by more established firms. Due to the desire of many license holders to leave the market, purchase opportunities will arise, allowing single-state operators (SSOs) to increase their footprints and multistate operators (MSOs) to grow into new markets.
Recent research from Brightfield Group reveals that Delta-8 products are already eroding CBD market share, with 35% of CBD customers reporting that they had bought some psychotropic hemp-derived effect in the last six months. Although the report found that it is still too early to estimate the impact of Delta-8 products’ increased accessibility on the sales of legal cannabis products, 23% of respondents to a Brightfield Group survey who use cannabis in states where it is legal said they plan to buy Delta-8 products in the future. Rising Delta-8 product sales will displace those of legal marijuana.
Industry share will continue to change as younger customers join the legal cannabis market, and adult-use sales become available in additional states. Younger customers spend more on vapor pens. Women are far more likely to buy topicals than men, whereas men are much more likely to purchase flower. Future cannabis product sales will be influenced by changing customer tastes, so in 2023 and beyond, companies must closely monitor these developments.
Studies predict a rise in micro-business and consumption licenses in the United States. New York will be a state to watch in the next six to twelve months and beyond. There is a good possibility for many smaller mom-and-pop businesses in New York. There is a good likelihood that microbusiness licenses will operate as a check against some of the states controlled by bigger MSOs, but by bringing in smaller operators.