Emerging Trends Shaping the Cannabis Industry in 2024

As the new year unfolds, the marijuana industry stands at the crossroads of optimism and transformative change, eager to leave behind the challenges that marked 2023. A year fraught with macroeconomic headwinds, from inflation to industry-specific hurdles like overproduction, legislation, and capital constraints, has set the stage for a pivotal 2024.

The landscape ahead promises a shift in the dynamics of the cannabis market. A nuanced evolution is expected at the retail level as product segmentation gains prominence. It’s a response to the increasing sophistication of consumers in their buying habits. These trends shape a more diversified and tailored cannabis market.

As the industry braces for the unfolding trends in 2024, Crested River outlines the top 5 marijuana industry trends to watch. We have a roadmap for people in the cannabis business. Let’s dive right in:

Calls for Government Action for Marijuana Producers in Saturated Markets

In mature marijuana markets like Colorado and Michigan, growers find themselves at a crossroads, contending with price compression and oversaturation exacerbated by a continuous influx of cultivation capacity.

A continuous influx of new cultivation capacities further exacerbates this issue. In response to this complex situation, businesses operating in these mature markets are reaching out to state governments, urging regulators to step in and address the problem by imposing a moratorium on new licensing.

The appeal for government intervention in the form of artificial market controls sparks interesting debates about its potential impact on the success of marijuana businesses.

As growers strive to find relief from the pressures of oversupply, there is uncertainty about the effectiveness of such measures. A prior attempt in Oregon a few years ago, involving the implementation of market controls, did not prove to be a cure-all for the state’s overproduction challenges. As a result, the industry is eagerly awaiting the outcomes of potential regulatory interventions and the implications they may have on achieving sustainable growth in these well-established markets.

Exploring the Impact of Delta-8 THC in State-Legal Marijuana Markets

In the last year, state-legal marijuana markets across the country have been wrestling with the task of formulating regulations for delta-8 THC. Regardless of whether a state boasts comprehensive marijuana laws or has minimal regulations, efforts were made to manage the proliferation of delta-8 products. However, these products found a niche in markets lacking oversight, creating a substantial challenge for licensed cannabis businesses.

The 2018 Farm Bill’s legalization of hemp production and its derivatives added a layer of complexity to the situation. As per the bill, the extraction of CBD from hemp flowers and its subsequent processing remains legal if the source plant adheres to the legal definition of hemp.

With no imminent changes expected in existing laws, the unregulated delta-8 market seems set to endure, causing a significant headache for the cannabis industry. In light of the regulatory uncertainties surrounding delta-8 THC, industry stakeholders are compelled to devise innovative strategies to navigate this intricate landscape.

The Downturn in M&A Activity and Capital Access in the Marijuana Industry

In 2024, the marijuana industry is anticipated to witness a notable decline in merger and acquisition activity, mirroring the wider challenges of reduced capital access in the United States.

The slowdown is evident in a significant decrease in reported company deals exceeding $100 million. It’s a departure from the previously dynamic market.

Persistent reports indicate a widespread shortage of capital, and it indicates that the industry is likely to face this tough economic environment for the foreseeable future. In response to the diminishing momentum of high-value deals, industry stakeholders need to formulate strategic approaches to deal with economic challenges effectively.

Evolving Trends in Cannabis Consumption Habits

In the dynamic marijuana industry, flower sales continue to experience growth across markets. Still, a notable shift is occurring as alternative products like vapes, concentrates, and edibles gain traction, reducing flower’s market share.

It reflects the evolving preferences of consumers who are exploring diverse consumption habits.

Despite the rise of alternative products, frequent users are not abandoning flowers; instead, they are incorporating various forms into their routines.

Live resin is gaining popularity, both as a standalone concentrate and infused into pre-rolls, cartridges, and edibles, overshadowing the declining appeal of distillate.

Surprisingly, new consumers represent only 6% of the cannabis market, spending less on average. The majority of sales come from established users, with 47% consuming multiple times daily, 17% once per day, and 10% five times per week or more. This nuanced consumption pattern highlights the industry’s need for diverse products to meet the evolving preferences of both seasoned and new consumers.

Rethinking Cannabis Industry Priorities as Potency Concerns Reach a Boiling Point

The new year will be a pivotal moment in the cannabis industry in terms of concerns regarding THC potency.

Testing labs, previously under scrutiny for potentially misrepresenting THC levels, now face legal consequences with fines and suspensions imposed by state regulators across the country. It’s a significant change in addressing the long-standing potency issue.

Industry observers are now more optimistic as they see a reduction in “lab shopping” practices and an improvement in consumer education.

The focus is shifting towards highlighting the diverse beneficial components of the cannabis plant beyond THC. There is a collective hope for a paradigm shift in industry priorities, emphasizing a more holistic approach to cannabis consumption and appreciation.

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