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Will Year of the Dragon breathe fire into the marijuana market in 2024?
By Andrew Kaye
December 28, 2023
According to the Chinese horoscope, 2024 is the Year of the Dragon, which represents power, nobleness, luck and, most importantly, success.

As the new year approaches, we’re thinking about trends likely to impact state-regulated cannabis markets in 2024.

Here are eight predictions:

1. Ongoing expansion of regulated marijuana markets means continued growth for both medical and adult-use cannabis.

Despite a continued federal ban on high-THC cannabis, new states will continue to legalize taxed and regulated marijuana markets.

People want it, the regulatory discrepancies between alcohol and weed are increasingly seen as absurd, and politicians love the tax dollars generated by the industry.

This is a national phenomenon for red, blue and purple states, whether they be in the North, South, East or West.

2. Rescheduling marijuana from Schedule 1 to Schedule 3 of the Controlled Substances Act will finally occur, resulting in the elimination of the Section 280E tax requirement and equalizing the tax burden for cannabis companies.This is a biggie that prevented cannabis companies from taking standard business deductions, thereby seriously hurting profits.

Furthermore, rescheduling can be accomplished by administrative rather than legislative action.

The U.S. Department of Health and Human Services (HHS) recommended a lower schedule in August, and the Drug Enforcement Agency is likely to concur.

Being able to deduct selling, general and administrative expenses like every other company in the United States will vastly improve the profits of cannabis businesses.

The public equity markets will love the change, too, as existing and emerging cannabis operators will show much better financial results.

3. SAFE, SAFER or SAFEST cannabis banking reform will not happen.

Presidential election years are never hospitable to new federal marijuana legislation or reform. The 2024 election year will be no different.

4. Incumbent states will continue to experience price constraints, while newly legalized states will enjoy (for a time) robust pricing.

Cannabis follows the same supply-and-demand forces as all other industries.

In incumbent states where legalized cultivation and sales have been in place for a decade, the large number of suppliers depresses prices.

In new legal marijuana markets such as Maryland, New Jersey and New York, the price per pound that cultivators get might exceed $3,000 at the start, but growers will no doubt face the same price declines as their Western counterparts as these markets mature.

The entire industry will need to become more efficient through automation to remain in business.
5. There will be more segmentation in the market.

As the cannabis industry matures, consumer segmentation will proliferate.

More than 50% of consumers are now women and nearly 60% of consumers are married with children, countering the “hippies and hip hop” image many have of cannabis.

To adjust, marijuana businesses should offer less-potent products in addition to stronger products.

6. The East will be a beast.

East Coast markets and, to a lesser extent, the Midwest markets, will continue to experience strong growth, albeit at a more modest pace.

Much will be repeated from the incumbent Western states, with initial wholesale prices of $2,500-$3,000 per pound followed by accelerating decreases in pricing as more participants enter the market.

However, the illicit marijuana market will plague the East as much as it has the West.

New York already is inundated with ubiquitous “smoke shops,” and enforcement has been spotty.

Florida will be huge as well, once the fiction of “medical cannabis” gives way to adult-use options.

7. Growth of consumption lounges.

The public use of cannabis in all its forms will be bolstered by the continued growth of consumption venues, and Las Vegas will lead the way.

Whether flower, edibles or beverages will dominate is anyone’s guess, but the cannabis hospitality industry will no doubt experiment with a variety of formats to find the formulas that work.

This will impact the industry in multiple, unknown ways as a more defined cannabis culture emerges as a result of individuals gathering to consume with friends and strangers.

https://mjbizdaily.com/these-trends-could-impact-cannabis-market-in-2024/