Legalizing cannabis for medical and recreational use in several countries in recent years has led to a boom in the industry, making it one of the fastest-growing sectors globally. The cannabis industry is expected to continue its growth trajectory in the coming years, with extraction and concentrate manufacturing being some of the most dynamic fields.
As the cannabis industry evolves, it faces new regulations, technological advancements, and market trends. These trends drive innovation and change in the industry, making it a challenging yet exciting time for businesses involved in the cannabis space. Companies must keep up with the latest trends and developments to stay ahead of the competition and ensure long-term success.
This article will explore the top trends companies must be aware of in 2023. By understanding these trends, businesses can make informed decisions and stay ahead of the curve in the fast-paced and dynamic world of cannabis. We will cover topics such as the increasing popularity of cannabis concentrates, the rise of new markets, the impact of legalization, the emergence of new consumption methods, and the growing importance of sustainability and ethical practices in the industry.
Let’s look at the second half of 2023 trends.
Cannabis Legalization in More States
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Legalization is one of the most significant trends affecting the cannabis industry. Ten more states are expected to legalize adult use in the next three years, which could unlock a potential market of 6.8 million new consumers, generating $9.1 billion in new sales. In addition, this will shift the percentage of representatives in Congress who support legal adult use from 48 percent to 67.5 percent.
Ancillary Companies on the Rise
Ancillary companies are gaining more popularity as the cannabis industry matures. These companies provide services or products that support the cannabis industry but don't touch the plant. Payment technology, software, hardware, and packaging are some examples. Investors are focusing more on ancillary companies than licensed operations due to the need for regulatory constraints.
Venture Capitalists and Investors Are Doubting Cannabis Companies
Raising venture capital is becoming difficult for cannabis companies. Although there are more conventional VCs in cannabis than ever, investment in the public sector has left some licking their wounds. Investors are cautious, with some focusing on ancillary products and services rather than licensed operations. A bifurcation of investor interest is developing around early-stage companies with less than $10 million valuations and publicly traded companies trading at one to two times revenue.
Cannabis Payment Technology Is on the Rise
One of the essential developments in the cannabis industry is the emergence of payment technology. The industry is seeking growth and profitability despite legal cannabis payments being at odds with federal banking regulations. Facilitating payments is the latest frontier for those seeking growth and profitability.
Investors Are Relying More on Due Diligence
More VCs rely on their peers and founder networks to identify companies with solid prospects. The era of “fear of missing out investing" appears to be over. Angel investors are sitting on the sidelines and waiting for returns from their portfolio companies. Hedge funds are circling in a holding pattern on new private offerings.
Cannabis Extraction Technology Is Advancing
Technology advancements are changing the landscape of cannabis extraction. Extraction methods have evolved from simple solvent extraction to more sophisticated ones, such as CO2 and hydrocarbon extraction. CO2 extraction uses carbon dioxide to extract cannabinoids and terpenes, producing high-quality oils. Hydrocarbon extraction uses ethanol, butane, propane, or hexane to extract essential oils and cannabinoids. Automation makes hydrocarbon more efficient, safer, and environmentally friendly than CO2.
Cannabis Concentrates Are Growing in Popularity
Cannabis concentrates offer consumers a more potent and cleaner product. Advances in extraction technology have enabled the production of more high-quality concentrates. Concentrates are a potent and convenient form of cannabis that offer various flavors, aromas, and effects. Popular concentrates include shatter, wax, crumble, and live resin.
Quality Control and Compliance Are Key
Companies must invest in quality control and compliance to meet the strict standards set by regulators. Meeting quality control and compliance standards is crucial for maintaining the trust and loyalty of customers and avoiding regulatory violations. Advanced testing methods are becoming more widely available, making it easier for companies to test their products for potency, purity, and contaminants.
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In conclusion, cannabis extraction and concentrate manufacturing is a rapidly evolving industry with many developments and trends that companies must be aware of in 2023. The legalization of cannabis in more and more states, as well as the growing acceptance of marijuana use, is expected to increase demand for high-quality cannabis concentrates and extracts. The top trends in this industry include innovative extraction techniques, increased use of automation, and the adoption of sustainable practices.
As we move forward, it is essential for companies in the cannabis extraction and concentrates manufacturing sector to stay ahead of the curve by constantly innovating and adopting new technologies. This is necessary to remain competitive in the market and ensure the industry's continued growth and success.
Furthermore, companies must prioritize sustainability and ethical practices in their operations. The industry must address its environmental impact and promote responsible sourcing of cannabis products. We must work together to create a sustainable future for the cannabis industry, where businesses can thrive while minimizing their environmental impact.
In summary, the cannabis extraction and concentrate manufacturing industry is on the verge of a significant shift, with new trends and developments shaping its future. Those who embrace innovation and sustainability will be the ones who succeed in this exciting and dynamic industry. Let's push the boundaries of what is possible, create new opportunities, and build a brighter future for the cannabis industry.
