It’s not often that a multi-billion dollar industry appears out of nowhere.
Despite the fact that the first-recorded cannabis use by humans was from as far back as 6,000 years ago, the emerging cannabis market remains a challenging enigma for most investors to wrap their heads around. The opportunity is there, but there are few precedents for companies pioneering in the space.
What will users look for in a legal cannabis product, and how can investors and companies prepare to make the most of this Wild West of a market?
What Investors Need to Know
Today’s infographic comes to us from The Green Organic Dutchman, and it serves as an introduction to the story of cannabis, providing context around the plant, its history, market trends, and the potential of emerging legal markets.
It’s the first part in an eight-part infographic series called “From Soil to Sale”, that will dive deeper into these trends and what they mean to investors.
The Bird’s Eye View
Cannabis has a 6,000 year history of human use – however, since becoming illegal in the early 20th century, it’s fair to say the knowledge gap has broadened as to the plant’s uses and potential.
A Quick Overview:
The female cannabis plant produces clusters of buds which are trimmed down for commercial use. Trichomes are small “hairs” on the outside of cannabis flower that produce and secrete resin, including the cannabinoids and terpenes sought after by users.
There are over 750 compounds found in the plant, including at least 104 cannabinoids.
THC is the cannabinoid you are likely most familiar with (it’s the psychoactive one), but another cannabinoid that is being intensely studied is CBD – a non-psychoactive medicine that has wide applications to several diseases.
Key Industry Trends
As the legal industry takes off, here are three consumer-focused trends to keep in mind as you watch the cannabis sector:
1. Environmental Sustainability
Indoor cultivation of cannabis is both energy and carbon intensive, while outdoor cultivation uses massive amounts of water. With these potential impacts in mind, consumers will demand cannabis products that minimize effects on the environment.
2. Organic Products
More consumers are leaning organic. The global organic market is expected to blossom into a $320.5 billion market by 2025 – and organic cannabis will likely see similar uptake.
3. Cannabis Retail Products
The market for cannabis-infused food and beverages is expected to grow at a 25% CAGR between 2018 and 2022.
In large legal markets like California and Canada, there is a multi-billion dollar opportunity for investors and companies in the cannabis space – and we will continue to demystify the legal cannabis market and how it works as we continue through this infographic series.
This is part one of an eight-part series. Stay tuned by subscribing to Visual Capitalist for free, as we go into the cannabis market in more depth.
As I understand it, it was Dupont who produced the movie in 1937 that depicted mj or hemp as a very dangerous substance. Well, it was competing with their new fibers,rayon, nylon etc.
So, for all these years it was outlawed. And now we are going full bore with mj. I bought weed and trssf. A big trend coming in this industry.
Hemp is going to be a big hit in this country. I can see a lot of light manufacturing start-ups as a result. I can see many small towns reviving.
You say investors.
I say vultures.
This is NOT investment advice, but it’s on topic. Over the past several months I’ve noted that CGC Canopy growth has had a pretty solid spread, so I’ve taken the trip several times. Bailed out too early this time, but that’s showbiz and I was plus $1,000 on a round lot. Another one that’s more erratic but might show promise is BUDZ Weed, Inc. I’m upside down on it right now, but expect it to bounce back with news.
a good summary…. it is fascinating to see the rush in states to get “licensed” growers, even though legalization is “pending.” Where there’s money to be made, there’s regulation to be imposed. And taxes.
Kind of odd,something that is illegal on the federal level yet has ?legal? Investors. Hmm would that not be a breakdown of law and order. Selective enforcement of the laws you like and dislike. Or is that just me.
Canada will soon legalize marijuana for commercial and medical sales. One of the markets poised to profit from legalization is the food and beverage industry, specifically beer and liquor. MJ is related to hops and both these plants are cash crops that pack flavor and aroma into beer. Ask any experienced beer fan or homebrewer about this, especially the ones growing hops at home.
Corona in particular has invested big money into the MJ startups.
I expect other corps may also pile in to get a share of the people selling MJ as a beer/food ingredient. Hops are big in the craft beer industry, so don’t be surprised when the next big beer fad is a pot IPA or NEIPA brewed exclusively for hopheads by some outfit in Kookifornia, Colorado, or Vermont. Corona is doing it and everyone else will, too.
***BUT***
Sales in the US won’t really have much chance for improvement until Sessions is gone at DOJ, or Trump appoints someone more friendly to marijuana legalization.