Cannabis Industry Predictions for 2024

Let’s look at the latest insights and 2024 predictions for the cannabis industry. This blog addresses the changing landscape, including regulatory shifts and market opportunities. Continue reading to explore the future of the cannabis industry and learn how your cannabis business can stay ahead in the coming year.

Growth and Expansion

In 2024, the global cannabis market is expected to experience substantial growth, fueled by emerging legal markets, innovative product offerings, and technological advancements. This growth presents opportunities and challenges, especially in navigating complex legal and regulatory landscapes.

Market Dynamics

• Projected Market Growth: The U.S. cannabis market is projected to grow significantly. Retail cannabis sales could reach $53.5 billion by 2027, with adult-use sales growing more rapidly. States like New York are working on finalizing details to launch approved programs, contributing to this growth​​.

• Technological Advancements: Blockchain and AI will likely revolutionize supply chain management and compliance tracking.

• Product Innovation: The trend toward personalized cannabis products is expected to gain traction as consumers become more educated and discerning. Cannabis companies will likely continue tailoring their products to meet a wide range of individual needs and preferences. However, pre-rolls are projected to continue to be a top product sale item in 2024. As people progress in their exploration and knowledge of cannabis, we believe they will gravitate towards craft cannabis products, and artisanal flower, despite the enduring demand for low-cost and convenient options.

Legislative Predictions

• Legalization: We foresee several additional states legalizing recreational cannabis in 2024. Federal legalization of medical or recreational cannabis appears to be a long way off, as demonstrated by the inability of the SAFE Banking Act to pass in Congress.
• SAFE Banking Act: This continues to be a pivotal issue, with potential movement expected in 2024.
• Federal Rescheduling: Anticipated action by President Biden could reshape the industry’s regulatory framework, impacting financial reporting and taxation.
• State-Level Changes: States like Maryland, possibly followed by Pennsylvania and Ohio, may influence regional market dynamics and tax structures.

Industry Trends

• Ancillary Services: As the industry grows, so does the demand for financial and ancillary services, highlighting the need for specialized accounting solutions and advisory services.
• Canadian Market Resurgence: Canadian cannabis stocks may witness a revival, affecting cross-border financial transactions and investment strategies.
• Global Influence: Germany’s role as a market catalyst emphasizes the importance of understanding international financial regulations in the cannabis sector.

State Trends

• Maryland and Neighboring States: Maryland’s recent move to full legalization is expected to influence neighboring states. Analysts predict that Pennsylvania might follow Maryland’s lead. There’s also pressure on Virginia to get its program operational in 2024.
• Vermont and Mississippi: Farmers in states such as Vermont and Mississippi, which have legalized cannabis, face challenges with federal regulations around hemp cultivation. The U.S. Department of Agriculture (USDA) has rescinded hemp licenses for some farmers who grow marijuana, reflecting the ongoing conflict between federal and state laws regarding cannabis.
• New York: The New York Cannabis Control Board anticipates approving additional licenses in early 2024. We will wait to see the progress.
• Continued Legalization Trends: More states are likely to embrace broader cannabis legalization, including CBD and Delta 8 THC, enhancing consumer accessibility across the U.S. This trend is driven by legal advancements, ongoing research, and shifting societal views.

Financial Implications

• Investment Opportunities: With the expansion of the cannabis market, investment opportunities will increase, requiring careful financial analysis and risk assessment.
• 280E Implications: 280E is still the number one challenge the industry faces. The high tax burden stifles growth and profitability in the cannabis industry. 280E makes it difficult for cannabis businesses to reinvest in their operations or to compete with prices on the black market.

Technology and Data Management

• Data Analytics: Big data will be crucial in understanding consumer trends and optimizing business operations, requiring sophisticated data management systems.
• Cybersecurity: With increased reliance on technology, protecting sensitive financial information and confidential patient data becomes crucial, highlighting the need for robust cybersecurity measures in the cannabis industry.
• AI: At this time, it’s challenging to assess AI’s impact on the cannabis industry because of the rapid pace of change and lack of capital to invest in AI.

Ethical and Social Considerations

• Social Equity: The industry must address social equity issues, including fair access to cannabis business opportunities and addressing past injustices related to cannabis prohibition.
• Sustainability: As environmental concerns grow, sustainable practices in cannabis cultivation and production will become a priority, affecting financial planning and reporting.

Global Market Integration

• Cross-Border Transactions: As international markets open up, cross-border financial transactions will increase, creating opportunities for organizations to expand.
• Compliance with International Standards: Adhering to international accounting standards will be critical for cannabis businesses operating globally, necessitating a deep understanding of diverse regulatory environments.

Risk Management

• Regulatory Compliance: Constantly evolving regulations by state will continue to require cannabis organizations to monitor and invest in compliance solutions. Compliance extends beyond basic operational requirements. It includes rigorous tracking and reporting systems to ensure seed-to-sale traceability, stringent quality control measures, and adherence to financial regulations such as the Bank Secrecy Act and Section 280E.
• Market Volatility: The cannabis market may experience volatility in 2024, requiring robust financial strategies to manage risks associated with market fluctuations. Initial excitement about the potential growth of the industry led to inflated valuations and a rush of investors looking to capitalize on what many saw as a “green rush.” However, as the cannabis market began to mature and face regulatory hurdles and competition realities, many stocks showed little movement in 2023 and are estimated to do the same in 2024.

As we look toward the transformative year of 2024 in the cannabis industry, with its rapid growth and evolving regulatory landscape, it’s clear that staying ahead in this dynamic sector requires specialized industry knowledge, experience, and insight. For those navigating these changes and challenges, seeking expert guidance will be more critical than ever.

If you’re looking to understand the implications of these developments for your cannabis business or investments, now is the time to reach out to BGM’s cannabis team for assistance and more information. Please contact us to learn more about how these changes might impact you and how to best prepare for a successful 2024 in the cannabis market.