Cannabis Grows Bigger Than Craft Beer Industry
Various industries have shrunk during the pandemic. This especially concerns sectors such as tourism and hospitality, food services, and education, which were paralyzed by the operational mandates on physical distancing and altered customer behavior as a direct subsequence of the pandemic. Although the world has been in one of the worst places since the end of World War Two, a relatively young sector such as cannabis has shown resilience and has in fact accelerated its growth. To some industry experts, it's even going to come out stronger, much stronger as the world navigates out of the pandemic. Like faring better than booze!? Woohoo!!
In the second half of October, the Las Vegas Convention Center hosted the three-day return of the MJBizCon, the largest cannabis industry trade show globally.
Industry experts examined the numbers by which it's shown the industry is measuring nothing but success. Despite the ongoing global health crisis that has mutated into an economic crisis, and despite unresolved questions that relentlessly loom like dark clouds—namely federal legalization and banking support—the cannabis industry is in good spirits. And things are only going to get better.
By the end of 2021, sales of cannabis products across the U.S. should surpass a figure of $26 billion, up from the record-breaking $20 billion last year. By 2025, the projected estimate is a whopping $45.9 billion, which as Chris Walsh, CEO and president of MJBizDaily remarked, is a figure that pushes the cannabis industry above a market like craft beer.
It's hard to imagine that a commodity such as craft beer can downtrend. But this is the result of a swirling pandemic. Once the bar and restaurant-goer segment of the market was targetted with restrictions, a significant slab of the craft product sales were substituted with ready beer packages.
According to some stats, overall U.S. beer volume sales declined 3% in 2020, with craft brewer volumes sales dropping 9%. The reduction affected small and independent brewers in the U.S. beer market share volume by 12.3%.
Retail dollar sales of craft decreased 22%, to $22.2 billion, and currently account for slightly less than a quarter of the $94 billion U.S. beer market. The beer market has generally reduced in size; it was worth over $115 bn in the pre-pandemic era. Its affected segments will hopefully recover.
Part of the cannabis industry's success is that interest in the plant and its derivatives is not exclusive only to the people within the sector. Over the last couple of years, the industry has strengthened enough to catch the attention of other sectors such as agriculture, tobacco, or beauty & cosmetics. Tech entrepreneurs are also chasing opportunities to help and innovate around cultivation, manufacturing, or packaging products. New tools for growing are being developed, and cultivation facilities are being packed with all the latest toys billed to augment yields.
Basically, as cannabis experts nod, the cannabis industry has entered a new growth and development epoch. It's an industry that is now maturing, particularly in states like Oregon, Colorado and Washington, where the commerce of dried flower, edibles, oils, and all other kinds of pot products are continually hitting new highs.
Elsewhere, cannabis companies are thriving. Green Leaf Medical in Maryland, AltMed in Florida, and CrescoLabs in Illinois are just three example enterprises that have almost doubled their operations and workforce during the past 12 to 18 months.
The industry is continually generating new jobs, and it presently secures the income of more than 320,000 fully-employed individuals. This number represented a 32% growth from 2019, when the number of jobs in the sector scored below 250,000.
Tea or beer? Won't mind either if it's spiced with pot.
Compared to other traditional sectors, salaries are more attractive too. A budtender can earn more than a bartender, and a trimmer can earn more than a regular gardener. There are more bucks for those in the cannabis edibles sector on the food processing and baking machines than those who perform similar tasks in an equivalent pastry shop. And so on.
The optimistic promise of prosperity that buzzes from the market attracts more and more people, especially those stuck in waning economies, seeking to reinvent their careers or invest in cannabis while the industry is still this small.
However, as yet another year is nearing an end, the weed business machine is still facing some of the same issues that have braked its wheels since the beginning. There's no sight of when federal legalization will happen, although, at this point, there are also fears that federal blessing may cause portions of the existing industry to diminish; a superseding law will likely demand at least partial reorganization. From the point of social equity, federal-level decriminalization might turn out disastrous.
General banking reform would allow cannabis operators to use the same financial services accessible to any other legal enterprise across the nation. This entails access to relief funds in times of crisis or taking a loan to set up a new shop. The reform is still pending.
In states such as California, the unregulated market continues to siphon bulk sums of money. Lawmakers across California are not doing much to repair dysfunctional cannabis regulations, while cannabis dispensaries remain out of reach in nearly 70% of the cities across the state. It has left a massive void for the underground market to fill in and generate almost $8 billion according to the latest estimates. The legal Californian cannabis market on the other hand dwindles to $5 billion per year.
What's more comforting is that now the U.S. has reached a historical point where two out of three Americans live in a state that permits the sale of recreational pot products. More than a dozen U.S. states can boast and toast they have some of the most progressive laws in the world that concern marijuana cultivation and production. Only a handful of other countries around the globe have more or less similar privileges with taking full advantage of the plant.
The very fact that a significant size of the U.S. territory has greenlit marijuana for adult use is striking a new tone in Capitol Hill. The cannabis industry has matured enough. Now it's the turn of the highest legal instances in the country to meet the sector halfway and reward it with legal and economic reform that works decently for big and small businesses alike.
S
Stephen Andrews
