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NEWSLETTER

Want to stay in the loop on the latest from the world of cannabis vaping? This is the place to do it!

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Top 8 Predictions for Cannabis 2021: Year of Big Falls & Even Bigger Opportunities

For many 2020 has been the year of giant tidal shifts, uncertainty and complete unpredictability. This was especially evident in the Cannabis space where the challenges of constantly shifting regulatory issues piled on top of the vape crisis just to be outshined by the Coronavirus pandemic related shutdowns and retail limitations, a business problem only closely supercharged by political shifts. Nothing was predictable; as the country began to shut down, and everyone buckled down, just to see the biggest spike in sales in March of 2020 as the consumers prepared for the long haul. Then as the industry prepared for the 4/20 retail rush, a big ooops – no expected spike or the revenues to show for it. Everything was upside down and all this had an obvious negative impact business, investment activities, growth and expansion.

 

The Big Falls

Long-term vision and planning were never a strong suite for most of our industry, but add such giant market shifts to an uncertain future and hundreds of smaller operations in the Cannabis space have suffered a blow that they could not climb out of in the near term. To understand the magnitude of this we need to realize that this scenario is not limited to your ma and pa plant-touching retailer or producer operation, but also the thousands of businesses that service them – fertilizers and nutrients, lighting and grow equipment, extraction and filling equipment, retail tracking and tracing systems, service agencies, hardware and software companies – the trickle-down effect has touched the entire industry. We all know at least a few formerly healthy looking companies that went under or are clearly on a verge of doing so between 2019 and now.

 

The Bigger Opportunities

All the while there are quite a few success stories that emerged during these times of extreme trial. These are the companies that are responsible for the positive outlook the cannabis industry as whole has right now. These are the companies that are responsible for spike in sales and renewed interest from the investor community. These are the companies that were institutional at their core, had the long-term vision of where they are going, kept an eye on the ball of what’s happening in the nation and were savvy enough to react and pivot when needed – swiftly and with precision. When you speak to some investors, they refer to 2020 as they year of cleansing, a period that any nascent industry endures when it shifts from a “gold-rush” to a real institutional market sector. These brands that were inherently more prepared than others, now have their pick at local, regional and even some national players at pennies on a dollar.

 

The Prediction

As savvy entrepreneur know, the quickest way to scale is to acquire talent rather than raise it, and what better time to do it than when multiples went from 8.0x to 0.8x with room to negotiate. In 2021 we will see more brand consolidation and M&A transactions than ever, which will force a more mature and stable Cannabis marketplace.

 

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