As the first month of 2023 drew to a close amid price compression, chronic oversupply and a possible recession, several marijuana industry professionals offered their predictions on how the industry will perform for the rest of the year. The trends of oversupply and price compression will most likely continue through the year, experts believe, with market oversaturation and oversupply reducing access to capital and causing prices to drop.
Arizona Dispensaries Association’s president of the board Lilach Mazor Power stated that players in the cannabis industry would have to make tough business decisions due to oversupply. Businesses will have to find unique and innovative ways to differentiate themselves from competitors, compete with the black market and attract more customers to their brands.
Consolidation within the industry is also expected to continue but at a reduced rate. The past couple of years have been characterized by several mergers and acquisitions in the cannabis industry. However, some experts believe that consolidation may slow down this year because of limited access to capital. Masha Ty from ACS Laboratory says that while consolidation points to industry maturation, it can also eradicate craft brands that simply can’t compete due to lower cannabis flower prices and complex regulations.
Another prediction for 2023 is increased on-site cannabis consumption for customers. Most, if not all, states with legal cannabis markets have banned public consumption. This means that tourists who travel to states with recreational markets usually have no way to consume legal cannabis unless a resident invites them into their home.
Smoke Honest cofounder Mason Palmer said that cannabis consumption lounges will “change the game” by encouraging safe and thoughtful consumption through “thoughtful design, art and experiential spaces.” More mature markets will also be able to improve the customer experience by making it possible for customers to test the product onsite before buying it, Palmer said.
This year will also see an influx of cannabis events, Visit Holyweed editor Dan Wilson said, with California especially seeing an increase in cannabis-related events and happenings. We can also expect the entry of more cannabinoids in the market, High Road Edibles chief operating officer Mike Zens said. Zens predicts that CBG, CBN and CBD-infused products will see growing popularity among customers throughout the year, challenging the industry’s reliance on THC potency.
Fruit Slabs chief operating officer Brandon Dorsky also predicts that 2023 will be the year for infused pre-rolls and beverages, a prediction that is shared by Grove Bags Chief Marketing Officer Lance Lambert. Lambert believes that cannabis-infused beverages, edibles and elixirs will come into their own in 2023, especially as younger generations increasingly turn away from alcohol to other social drugs that have little to no side effects.
And even though there is little chance lawmakers will legalize cannabis at the federal level, we can expect more states to pass marijuana legalization measures. At the moment, states such as Hawaii, Ohio, Minnesota, Oklahoma and Pennsylvania have a good shot at legalizing cannabis use for adults this year.
If those states pass legalization measures, financing alternatives such as those provided by REZYFi Inc. could grow in importance to support the growth of the industry in those newly created markets.
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