The Future of Cannabis in 2024 Looks.... Expensive and Full of Litigation

By Claire Kaufmann | December 22, 2023

This time of year, we all attempt to stare into our collective weedy crystal ball and see into our industry’s future. Phew, what a year it has been! Beloved cannabis brands going out of business, downward pressure on pricing at the wholesale and retail level, a booming black market and mutliple failed legislative efforts at the federal level. Sounds like fun, sign me up, righ?!

Cash-strapped small companies are stretched to the max, layoffs are rampant, many cultivators and producers can no longer sustain themselves, and retailers limp along month after month. The state-by-state, whac-a-mole legalization efforts have made doing business complicated and often prohibitvely expensive. With all the turmoil, it’s no wonder that just staying afloat in the coming year will prove to be extremely costly. Struggling firms are likely to continue to struggle, and as a result ,the industry will continue to experience massive consolidation across the board.

Further, I expect those in the lead may face legal backlash, stalling their progress. For the same reason there isn’t a beer company named “Gummie Bears,” nor a Tobacco company named “Ice Cream,” “Cookies” and other brands that skirt the legal boundaries of what is allowed should expect to start attracting attention from regulators. As their footprint grows, so does their influence and popularity. With great power comes great regulation ;). Cookies, and others with similar names, should expect costly legal battles and trademark disputes. (I’m sure the Cookies team is already working on this. IDK, maybe Cookies should just flip the “s” to a “z” now and be done with it?)

The consumer safety issue will begin to become more paramount, as the industry grows and experiences greater and greater consumer penetration. There are very few studies on the long term health effects of cannabis consumption, despite 70% of adult Americans supporting federal leglisation.

So where to go from here? In order to survive in the coming years, firms will need to show restraint and patience, testing before spending, observing before taking action. Smaller firms could consider using this as a time to trim the balance sheet and get acquired. Larger firms could use this as a time to create efficiencies of all kinds, so when the market does come back, and I do think it will at some point, they will be ready to grow smoothly. Either way, 2024 is likely to be one full of grit and further volatility.

Claire Kaufmann is a global hemp and cannabis insights leader. For more information or for help with your next project visit https://www.ofsubstanceinsights.com. Happy Holidays!