Joelah JamesSomething strange happened in Aspen, Colorado last year. Strange, because it is the first time such an event has occurred legally anywhere in the continental US.
Marijuana sales brought in $11.3 million, eclipsing alcohol sales by a huge margin.
That’s right ladies and gentlemen. Binge drinking days are on the decline. The legalization of cannabis by Canada in 2018 has opened up a market filled with myriad possibilities.
A market with an estimated value of 23.4 billion by 2022!
Here’s a quick glimpse of investors in the market, industries with future potential and shipping cannabis.
Not a drug. A leaf.
A year ago, retailers wouldn’t have dreamt of lining up their shelves with marijuana. Now they’re dreaming up creative ways of using and marketing cannabis and its associated products.
Marijuana that is widely in use today comes from the herb Cannabis sativa. The compound in cannabis that produces the high is a cannabinoid called THC (tetrahydrocannabinol). When it comes to medical or wellness products, another cannabinoid called CBD (cannabidiol) is used.
CBD is accepted for its many health benefits, while THC is not legalized in many places due to its psychoactive nature.
This is where hemp comes in. It is legal is most states due to its high CBD content. As CBD has the property of counteracting the effects of THC to an extent, hemp is relatively weaker than its relatives (the legal ones have less than 0.3% of THC!).
This fiber is well known for being a better alternative to cotton. The fact that it was illegal to raise hemp in most states prevented farmers from using this easy to grow herb all these years.
The US Farm Bill passed in 2018 legalizes the cultivation and use of hemp across the United States. The effects of this Bill are still being speculated, but what this means to retailers is obvious.
Not only can farmers grow this cash crop easily, the profits and value will far exceed that of cotton or any other plant grown for industrial use. Hemp fiber can be used to make hardier clothing, eco sustainable paper, biofuel, food and building materials. Hemp oil or CBD oil is also a hot commodity at present.
Source: Statista
A friend with weed is a friend indeed
So who’s gotten a seat at the table?
The recent legalization of cannabis in Canada has blown open the market for retailers in both the US and Canada.
As it is restricted in many states within the US, retailers are partnering up with Canadian companies like Aurora cannabis and Tilray or buying shares into Canadian cannabis businesses.
As for stocks, just the mention of cannabis seems to skyrocket them at the moment. This has been true for companies like New age beverages corp., IntelGenx technologies and Alkaline water.
Even Shopify has gotten its share of the pie by becoming the website provider for many major deals including Aurora cannabis!
Alkaline Water, Corbus Pharmaceuticals and IntelGenx saw a more than 50% hike in market shares after announcing their plans to include CBD in future products.
The cannabis market has also seen unexpected growth in Europe. A previous estimate of $200 million has now grown up to $1 billion euros due to the involvement of some big names like Anheuser Busch, InBev NV, and Novartis.
Got a friend in Canada who can produce some good stuff? You should be getting on a call with him/her right about now!
Of course we know how to roll.
Some companies got into partnerships. Others have pulled their sleeves up and jumped headlong themselves.
The sudden spike brought about by the legalization of cannabis in Canada has pushed several big names into the fray.
Nobody wants to be left behind, and the properties of CBD have become a great selling point (just like kombucha did earlier). The current US market for cannabis infused beverages is at around 6%. This could easily become 20% by 2022.
Even Coca Cola is considering setting foot into the cannabis beverage scene.
We’re talking a market worth $600 million in the next four years. This has the solid potential to outpace the growth of other retail categories in cannabis products.
Those who are currently pursuing the cannabis beverage market aggressively include Constellation Brands (producers of Corona) and Molson Coors Canada.
There are also interesting startups like California dreamin which advertise cannabis infused beverages that give consumers a light social high with just 10 mg of THC!
California Dreamin is one of those headlong divers we discussed earlier. Let’s not forget the rest who are more cautious, and choose to analyze industry data and risks before throwing in their bet.
Firms like canaccord genuity have popped up to cater to the needs of these cautious souls. Boasting a global presence, they do market/equity research as well as investment banking. With a high profile clientele like Aurora cannabis, they’ve gained quite some popularity.
Wondering where to grow?
If all these seem like high profile ideas to you, and you’re looking at something a little simpler to start off with, then you might want to consider the following options.
- Cannabis accessories has become a formidable market in its own right (it helps that accessories aren’t deemed illegal anywhere).
- Did you know there are even CBD infused pet snacks? They are proven to help pets with chronic pain, inflammation, arthritis and seizures.
- Already in the pharmaceutical business? CBD based drugs like Epidiolex that are slowly gaining approval can help you scale your business.
- Food products like nutrition bars or quick snacks that contain minimum levels of CBD (their high nutritive value is quite the USP) or even THC (if legal).
- Beauty and skin care products that are infused with CBD. It’s got all the properties for clearer skin, muscle relaxation, and whatnot.
Can we ship it? Yes we(ed) can.
Shipping cannabis has always been problematic. Within the US, mailing it from a legal state to an illegal one has been happening for several years (despite being considered a federal offence). Shipping carriers have found and reported illegal cannabis being shipped through fake names and addresses.
The legalization in Canada has brought about other shipping concerns. Firstly, legal stores seem ill prepared to deal with the huge influx of orders pouring in from customers.
Secondly, they need to figure out faster shipping options to get orders delivered on time. When the latest Canada Post strike occurred, orders were delayed by over a week in Ontario and a few other parts of Canada. Figuring out an alternate shipping plan in case of such unforeseen circumstances would be beneficial to cannabis retailers.
While recreational cannabis users can accept the delay (even if it had been meant for a weekend), those who need it for medicinal uses cannot be made to wait.
If you’re shipping cannabis within the US, these are the places it is currently legal in.
- Alaska
- California
- Colorado
- Maine
- Massachusetts
- Michigan
- Nevada
- Oregon
- Vermont
- Washington
- District of Columbia
- Northern Mariana islands
But you still cannot mail it like any normal package. Mailing it through the USPS is an outright federal offence even within states that have legalized cannabis use. As for FedEx and UPS, they can open any suspicious packages at will. Considering this, it is always wise to ensure
- That you check the legislature of the state or place you ship cannabis to
- Double check the allowed volume of marijuana even if it is legal
- Alert your carrier to the new item you will be shipping through them and submit appropriate documentation where necessary
- Package the contents in heat insulated air tight packaging so that they don’t smell of the trademark scent.
- Clear specifications of shipping and return policies on your website
Online stores like Ignite CBD and Tweedle Farms sell legal industrial hemp that they produce. The sites give out authentic information on what consumers can expect from each of the products. The shipping and return policy for CBD oil and other products is also given in detail.
If you’re foraying into shipping out cannabis or cannabis products to your customers, creating a brand identity now will create an edge over later competitors. Gain a niche of loyal customers with well sourced products, excellent customer service and hassle free last mile deliveries. Services like LateShipment.com can help you with last mile competency and ensuring that customers receive their packages on time.
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