What to Expect from the Cannabis Industry in 2021
2020 was a hell of a year for the cannabis industry. Cannabis was deemed an essential business during a global pandemic. It proved to be a bipartisan issue, as several red states voted to legalize recreational and medical cannabis. Plus the House of Representatives passed the Marijuana Opportunity Reinvestment and Expungement Act (MORE Act) and the Medical Marijuana Research Act (MMJ Research Act), both now pending before the Senate. As we move into 2021, what can we expect from the industry next?
Pending Cannabis Legislations
Passage of the MORE Act
The MORE Act’s passage would remove marijuana from the schedules of controlled substances under the Controlled Substances Act (CSA). The MORE Act demonstrated that there is enough bipartisan support to pass in the House of Representatives, and it could likely pass the Senate in 2021. However, the timeframe for the passage of this act heavily lies on the Senate race in Georgia. Should Democrats win the two Senate seats in Georgia’s upcoming special elections, the bill will quickly pass the Senate.
Cannabis Banking
The Secure and Fair Enforcement Banking Act of 2019 (SAFE Banking Act) is a bipartisan bill seeking to allow Marijuana-Related Businesses (MRBs) access to federal banking services. According to Nathaniel Gurien, CEO of Fincann, a cannabis banking solutions provider, the SAFE Banking Act is likely to pass in 2021. However, Gurien noted, it would have little effect on the industry since it primarily ensures it will protect the cannabis protocols put in place by the 2014 FinCEN banking guidelines.
MasterCard, Visa, Amex & Discover are on the record stating that the passage will not affect their prohibition of THC and cannabis licensee transactions. Despite its effect, the passage of the act will encourage more banks to service the industry, thus creating more opportunities for small businesses.
Sustainability Matters
Sustainable cannabis products and practices are on the rise. Today’s consumers are increasingly concerned about climate change and don’t mind purchasing slightly more expensive products that are more sustainable and eco friendly. We expect to see a continued increase in awareness and adoption of sustainable products and practices.
Private companies such as Sana Packaging, GrowEx and GAIACA Waste Revitalization are some of the private leaders. As new markets continue to enter the industry, we can expect to see the adoption and implementation of sustainability centered regulations relating to packaging, cultivation, and waste reduction.
CBD
Cannabidiol (CBD) was a hot commodity in 2019. By 2020, however, the industry became oversaturated with CBD companies, resulting in many lowering prices to remain competitive. In 2021, we can expect to see a consolidation of the market due to oversaturation, forthcoming federal regulations, and COVID-19’s impact on small businesses. The Hemp and Hemp-Derived CBD Consumer Protection and Market Stabilization Act of 2020 (H.R. 8179) was introduced to Congress in an attempt to regulate CBD in dietary supplements.
If passed, CBD companies will have to comply with the U.S. Food and Drug Administration’s existing guidelines for dietary supplements, which include labeling and safety requirements and Good Manufacturing Practices (GMP). Adhering to these regulations can be costly and time-consuming. Today, CBD companies are preparing for these changes and those left lagging will likely be forced to shut down.
Product Innovation
Staying relevant in the industry is a challenge companies will continue to face. CBD is out, and minor cannabinoids, like Delta-8 THC, are in. As a result, CBD companies are adding CBD to all kinds of various products to keep up and stay in the game. Will we see the same with minor cannabinoids?
In 2021, we can expect to see product innovations in sexual wellness products, Delta-8 THC, expansion of cannabis flower strains, beverages, microdose edibles, and a whole lot of interesting branding marketing campaigns like seen with Moxie’s 2020 limited edition cannabis line inspired by Netflix’s hit series, Tiger King.
Expansion of Cannabis Legalization
Cannabis won big during the November 2020 elections, as all 5 states with cannabis on the ballot passed legalization measures. New Jersey legalized recreational cannabis, which will be a likely catalyst for legalization measures in New York, Virginia, Connecticut, Pennsylvania and Maryland. With new markets entering the cannabis space, comes the expansion of job opportunities for those looking to enter a burgeoning market. As brands expand across state lines and focus on communications, marketing and advertising (if you’re one of those brands, make sure you have a plan for your 2021 SEO and PR efforts.
A Year Ahead
In 2021, we can expect cannabis to be more accessible than ever as COVID-19 expanded delivery services and introduced curbside pick-up services that are likely here to stay. Virtual events, like our monthly digital mixer, picked up steam and we see many 2021 conferences planning a hybrid of remote and in person events. 2021 will be a big year for cannabis legislation, product innovation, sustainability, and new cannabis markets. Stay tuned to see what predictions come true!
