Although the pandemic slowed progress, the outlook is brighter as more companies enter the market and the regulatory environment has the potential to change.
There were big expectations for the cannabis-infused food and beverage space leading up to the start of last year. Venture capital investment was increasing, seasoned executives were jumping into the trendy space and established players pledged to launch products.
But 2020 was not the breakout year for cannabis that some had anticipated.
Although the industry made progress, the pandemic slowed down product development as many companies shifted focus to the coronavirus. Federal regulation also stayed in a gray area, with no further guidance and many questions around the space unanswered.
“We’re seeing legalization spread to markets that were a challenge for cannabis activists in the past … so I expect that to continue in the coming year,” said Alex Esposito, research analyst at Euromonitor International. “As more recreational markets come online, we generally expect there to be more availability of edible and beverage formats.”
With potential regulatory changes on the horizon, more companies are moving into the U.S. market with products that have CBD, the popular nonpsychoactive compound of the cannabis and hemp plants, and THC, the most well known psychoactive component. Several companies from Canada are entering the U.S. market through acquisitions and readying launch plans that could shake up the category — and push more big-name players to jump in.
“The U.S. is expected to be the largest market opportunity globally and we will be ready and well positioned to compete in the U.S. when cannabis is federally permissible,” said Irwin Simon, chairman of the board and CEO of Aphria, a Canadian cannabis company that is entering the U.S. market through a recent brewery acquisition.
Published: January 19, 2021
Founder & Interim Editor of L.A. Cannabis News