Small Scale Cannabis Growers Carve Out a Niche in the Burgeoning Industry
As the cannabis industry continues to advance, competition among operators is becoming more and more fierce. In particular, the competition between growers has become much more prevalent when compared to retailers, according to Deepak Anand, a cannabis industry expert based in Vancouver. As of March 2019, statistics released by Health Canada indicated that the agency only received 150 applications for micro-cultivation or processing licenses. Generally, macro-cultivators tend to dominate the cultivation segment of the overall cannabis industry, as they are able to produce tons of cannabis each harvest. By mass-producing cannabis, macro-cultivators can wholesale their supply to distributors and retailers at a cheaper price. However, Anand noted that micro-cultivators have to wait for at least 18-months before getting approved for a license, which usually deters entrepreneurs from applying. As a result, many micro-cultivators find themselves working in gray markets while waiting for approvals. Nonetheless, numerous service providers within the industry have secured partnerships and contracts with companies awaiting such license approvals. For instance, companies have hired consultants to guide them throughout the process of receiving an approval. Moreover, some producers have inked agreements with companies to supply them with their own products in an effort to accelerate their approval time. Furthermore, according to data compiled by GlobalInfoResearch, the global legal marijuana market was valued at USD 7.97 Billion in 2019. And by 2024, it is expected to reach USD 35 Billion while registering a CAGR of 28% over the next five years. Pasha Brands Ltd. (OTC: CRFTF) (CSE: CRFT), Innovative Industrial Properties, Inc. (NYSE: IIPR), Aphria Inc. (NYSE: APHA) (TSX: APHA), HEXO Corp. (NYSE: HEXO) (TSX: HEXO), Green Thumb Industries Inc. (OTC: GTBIF) (CSE: GTII)
The Top Companies Disrupting a Massive $23.7 Billion Medical Cannabis Market
Global demand for cannabis-based consumer products has been increasing at a rapid pace. In fact, the Brightfield Group estimates the U.S. CBD product market alone to be worth over $23.7 billion by 2023, as CBD finds its way into a variety of consumer product categories including food and beverage, pharmaceuticals, and health and wellness. Analysts at Research and Markets say the global medical cannabis market could be worth up to $44.4 billion by 2024 from just $13.4 billion last year. In addition, analysts at Statista says U.S. medical retail sales could reach $7.3 billion by 2022, as compared to $4.5 billion sales in 2018. Better, according to a May 2018 survey from Nielsen, analysts found that consumers are quickly embracing CBD products, particularly when it comes to medicinal purposes. In fact, according to the survey, 40% of head and migraine suffers are considering cannabis in addition to 40% of all arthritis pain suffers, and 41% of all back and neck pain sufferers. As CBD continues to disrupt major industries, it's creating a wide range of opportunity for companies such as XPhyto Therapeutics Corp. (CSE:XPHY), HEXO Corporation (NYSE:HEXO)(TSX:HEXO), Aphria Inc. (NYSE:APHA) (TSX:APHA), Tilray Inc. (NASDAQ:TLRY), and OrganiGram Holdings Inc. (TSX-V:OGI)(NASDAQ:OGI).
The Cannabis Market Continues its Sprawl as Legalization Efforts Intensify
The cannabis industry has been witnessing robust growth throughout the U.S., largely due to increasing legalization and decriminalization efforts. Currently, 44 U.S. states have varying degrees of cannabis laws, however, under federal regulations, cannabis is still considered illegal. Additionally, U.S. legislation lists cannabis as a controlled substance. And the Controlled Substances Act (CSA) classifies cannabis as a Schedule 1 drug, primarily because of its marijuana derivative. Under the CSA, marijuana is viewed as a highly addictive drug and serves no medical benefits. Overall, cannabis is predominantly split into two derivatives, the hemp and marijuana plant. The marijuana plant causes cerebral-altering effects because of its THC or tetrahydrocannabinol content. On the other hand, hemp contains an insignificant amount of THC, but is rich with CBD, or cannabidiol. While the two are widely different in their biological makeups, THC and CBD both serve similar demographics. Specifically, THC and CBD are both being used for recreational and medical purposes. Researchers have also highlighted that both compounds can effectively treat a variety of medical conditions such as arthritis, chronic pain, and epilepsy. However, despite medical breakthroughs, the cannabis industry is still heavily hindered by legal barriers. And as research continues to undermine the stereotype revolving around cannabis, the overall industry is expected to become prevalent. According to data compiled by Ameri Research, the global legal marijuana market was valued at USD 14.3 Billion in 2016. By 2024, legal marijuana global sales are projected to reach USD 63.5 Billion while exhibiting a CAGR of 21.1% from 2017 to 2024. Americann Inc. (OTC: ACAN), HEXO Corp. (NYSE: HEXO) (TSX: HEXO), OrganiGram Holdings Inc. (NASDAQ: OGI) (TSX-V: OGI), KushCo Holdings, Inc. (OTC: KSHB), Emerald Health Therapeutics, Inc. (OTC: EMHTF) (TSX-V: EMH).