As we head into 2023, cannabis continues to be a rapidly growing and evolving industry. The percentage of U.S. adults who say they have tried marijuana is sitting at 49%, the highest measurement to date. Just seven years ago, only 40% of Americans said they tried cannabis at some point in life.
Weedmaps’ 2021 survey of cannabis users reported that since March 2020, half of the respondents started consuming more cannabis because of the pandemic. Online cannabis orders increased by 55% in the first half of 2021 when compared to the first half of 2020. As more states legalize marijuana, this trend will persist in its upward progression, especially in 2023.
Whether you are a new dispensary that recently opened your doors or are an experienced business owner looking to stay ahead of your competition, Leaf Retailer has rounded up a list of 2023 cannabis predictions from some of the top experts in the industry:
- Cannabis and Celebrity Interest
- New Merger and Acquisition Opportunities
- An Enhanced Focus on Wellness
- More Cannabis Legalization Across States
- Continued Focus on Data Analytics in Cannabis
- Enhanced Cannabis Regulatory Enforcements from States
- Popular Products in 2023
- Federal Legalization on Cannabis?
Cannabis and Celebrity Interest
More celebrities are tapping into the cannabis market and will continue to do so, according to Marlo Richardson, owner of several cannabis brands. Many marijuana businesses have started to team up with celebrities and lean more into the entertainment industry to push their products.
In return, these celebrities are pursuing their own marijuana entrepreneurial ventures. From Diddy, who purchased licensed marijuana operations in three states for around $185 million, to Jimmy Kimmel, who partnered with entertainment company Wheelhouse Labs, which handled marketing for Weedmaps.
“While 2022 brought two more states into the adult-use market, the state of the cannabis industry seems to be in flux. I think 2023 is going to continue the wave of consolidation, celebrity deals, and a trail of small mom-and-pop shops in their wake,” Justin Kahn, CEO and Co-founder of reepher, said.
New Merger and Acquisition Opportunities
As the industry continues to grow, Justin Brandt, founding partner at Bianchi & Brandt, predicts that there will be a spike in mergers and acquisitions to mark the new year as larger multistate operators buy up small and medium-sized brands. Running a cannabis business is incredibly expensive, so this may help many of those smaller companies to thrive.
Eric Leslie, Co-owner and CMO at Cheeba Chews, says this will be a goal for their brand in the new year. “For us, 2023 is really about continuing relationships with partners in different states. Once we are able to tap New York, I think you will see us move up and take a look at the Vermont domains. I love the area up there — we just want to find great partners that love the brand as much as we do.”
An Enhanced Focus on Wellness
The COVID-19 pandemic caused an uptick in cannabis marketing efforts to be more geared toward wellness and health. Research suggests that marijuana can help with anxiety, aches and pains, and insomnia, which are all big categories for growth within the industry. Using this as a focus for marketing campaigns can assuredly help to bring in more sales.
“Brands are seeing the value and lucrative opportunities to tap into the health and wellness space,” Richardson said. “For instance, I think we are going to see more cannabis companies collaborating with researchers to conduct studies on the efficacy of cannabis for various medical treatments.”
More Cannabis Legalization Across States
Come 2023, Kristi Palmer, Co-Founder of Kiva Confections, predicts that we will begin to see the remaining states that have been on the fence about legalization flip their positions once they see the benefits and revenue it brings. As states continue to legalize marijuana, the pressure will mount on the federal government to act.
More Cannabis Legalization Across Europe
In 2023, Susanne Caspar, CEO of Swiss-based Linnea, expects the conversation to continue about cannabis legalization, in Europe especially, and believes that it is important for the medical cannabis market to grow and strengthen to match this market expansion. The needs of the medical patient and the recreational customer are not interchangeable. Here is why:
- Recreational consumers can use any cannabis products of their choosing
- Medical patients require consistent, standardized, and reliable pharmaceutical products with administration forms that ensure safe therapy
Brian Fitzpatrick, President and CEO of Qredible, also believes that state legalizations will continue to pressure the government for federal legalization. Even if nationwide legalization does not happen next year, there will be at the very least progress from the states that ultimately push toward the goal.
Continued Focus on Data Analytics in Cannabis
Data analytics played a huge role in the success of cannabis businesses in 2022, and experts predict a continued sharp uptick next year. Mike Luce, President at High Yield Insights, anticipates that brands will not only use data analytics for consumer behaviors, but also to help with operations, cultivation, and supply chain issues.
Using Data Analytics to Differentiate Your Brand in 2023
For the most part, cannabis consumers have been shopping for products based on price and THC content. In order to get into their mind and differentiate your brand from the competition, Luce advises that businesses collect and leverage data about current and potential customers.
“I think the days of email blasts, percentage off certain categories, and other deals are over. Consumers do not care about them and it does not connect your brand with their user preferences. Align your marketing strategies to have better conversations with shoppers. To do that, you need to do a lot of work and research, but those are the data-driven decisions that need to be made,” Luce said.
Enhanced Cannabis Regulatory Enforcements from States
In 2022, many states were cracking down on cannabis manufacturers who were not following proper regulations. Brian Vicente, Founding Partner at Vicente Sederberg, says we will continue to see enhanced reinforcements by state regulatory authorities, as well as the FDA and other relevant federal bodies, to help stop these bad practices.
“We need to make sure that states have this funding through state level taxes and fees in order to send out more enforcement agents who can issue letters to those making absurd health claims on their products. Enforcement is crucial to a successful cannabis industry. If you look at alcohol or tobacco, we do not have speakeasies on every corner. Instead, we have licensed businesses where consumers know they are purchasing something produced in a safe fashion. That is what we need for cannabis,” Vicente said.
Cannabis Popular Products in 2023
Leaf Retailer spoke with two different cannabis brands to get their thoughts on what will be popular in the new year.
“Looking back at 2022, CBN was one of the most requested cannabinoids within the industry,” Kristi Palmer, Co-founder of Kiva Confections, said. “Kiva’s suite of CBN products quickly became our #1 best-selling line. CBN aids in sleep, and everyone is in need of a good night’s sleep. We will see this trend continue into 2023, with brands also incorporating other buzzy cannabinoids into the mix that provide unique and functional benefits.”
The Expansion of Product Formats
Kristi also predicts that product formats will continue to expand. Gummy has been the most sought-after edible as of late, but that could shift as consumers are given access to quality, delicious, and consistently-dosed items in other categories, as well.
Old School Strains Making a Comeback
Khalid Al-Naser, Co-founder of Raw Garden, says the gas and skunk varieties of old may be back on the rise, as well as the old-school purple varieties from the mid 2000’s such as Purple Kush and GDP. The varieties that are sweet and fruity may dwindle a bit because of this trend.
More Discussions on Freshness and Aromas
“The gamut of product types that can be created from the cannabis plant seems to have run its course at this point. Now, it is all about increasing the quality within those types and understanding more about aromas and novel cannabinoids,” Al-Naser said. “One thing that would be excellent to see is the education around potency not being the key indicator of quality. Freshness and aroma, or fresh-aroma, need to become the hot topic that we drive home with the bulk of consumers.”
The Million Dollar Question: Federal Legalization on Cannabis
Federal legalization is still up in the air, and many experts predict that it may take a few years until this long-awaited bill finally passes. While 2023 would be a nice goal, there is still so much that needs to be done that cannot happen in just one year.
“This needs to be done ASAP, because much of the industry is getting off the ground with better banking and it is causing issues with state laws that conflict with federal laws,” Connor Shaw, Business Agent at Cannabis Engineers Extractors & Distributors (CEED) Local 420, said. “In New Jersey, they just passed a law where residents in the state cannot get punished for consuming marijuana while off duty, but some workers are still getting drug tested regularly. The government needs to update their laws and that is what Americans want.”
Hope for State Legalizations
While it is too soon to tell how far out we are from federal legalization, Vicente says many states are primed to pass their own legalization laws. Oklahoma and Minnesota are ready for that next step on the adult-use cannabis side, and it will also be a robust year for medical marijuana bills. There have been considerable movements in the Carolinas, as well as Kentucky and Kansas. The market will continue to expand and offer better access for users in those jurisdictions.
Hope for the SAFE Banking Act
Many experts believe that there is a good chance the SAFE Banking Act will get passed in 2023. Even though there are ways for cannabis businesses to utilize banks and not be strictly cash-only companies, there are so many hoops that both they and the bank have to jump through, making it incredibly cumbersome to use one. The SAFE Banking Act would come in and change up the ties and regulations on banks.
“We are getting close toward federal legalization, but I think we are still a few years out,” Vicente said. “Biden has been making some fairly substantial movements toward studying, rescheduling, and pardoning individuals for cannabis, but that is not getting us closer toward legalization. I can certainly see the support for cannabis reform and legalization growing among the public every year. With more states passing these laws, it is becoming inevitable that the feds will have to play catch-up.”
Federal legalization would have a huge impact on the cannabis industry. Blandine Jean-Paul, VP of Marketing at Ethos Cannabis, believes that once federal legalization takes place, marijuana will become very similar to alcohol and more households will accept it. There will be an explosion of different ways to consume cannabis and new products that will come out. It is sure to be an exciting time.
Until then, let these 2023 cannabis trends help dictate your marketing and product purchasing efforts in the new year, helping to introduce new customers to your brand.