The coming year will bring the cannabis industry new state legalization initiatives and a resurgence of investment but is unlikely to result in meaningful federal MJ policy reform, predicts Marijuana Business Daily CEO Chris Walsh.
Walsh made his annual marijuana business trend predictions in a virtual presentation Friday at MJBizCon 2020:
1. More states to legalize adult use, one state to legalize MMJ and Texas program to expand
In Walsh’s view, states that could legalize adult-use marijuana markets in 2021 include New York, Virginia, Connecticut, New Mexico and Maryland, among others.
“We’re going to be coming out of this COVID pandemic, states are going to be looking to bolster their economies, and I think cannabis is a great way to do it,” he said.
Walsh also believes another state will legalize a medical market and that Texas’ CBD-centric medical program could see reform.
“I think it will be material enough that Texas will open up as a promising new market on the medical cannabis side.”
2. Investment to surge starting in Q2
Walsh expects a surge of new capital flowing into the cannabis sector starting in the second quarter of 2021.
“As we get the first parts of these vaccines out there and people feel more comfortable that this is working … we will see investors moving in early,” he said.
“If that holds true, that’s going to be great because we’ve been under capital crunch for most of the year and I know that’s affecting a lot of businesses.”
3. USDA takes a closer look at hemp, FDA does not
In the hemp space, Walsh anticipates that new leadership at the U.S. Department of Agriculture will result in the agency taking “another look at looming rules for a nationwide hemp regulatory framework.”
“We’re hoping that the USDA gives the hemp industry a big win with remediation of ‘hot hemp,’” he Walsh.
However, the U.S. Food and Drug Administration will likely be too busy with COVID-19 vaccines to make any major hemp moves in 2021, Walsh predicted.
4. In Canada, a major merger while micro growers ascend
Even though Canada’s recreational marijuana market is still growing, Walsh said he expects “a big mega-merger” in 2021 among some of the country’s largest licensed producers, some of which are grappling with the consequences of overexpansion.
“It’s likely not sustainable that you can have all of these giant companies, at least how they’re being run now and how the market is evolving now,” he said.
On the other hand, Walsh sees Canada’s growing number of small-scale “micro” producers finding a solid foothold in the market.
“I think they will prove that there is a market for what they produce – craft cannabis, not on a mass scale.”
5. No meaningful federal change in U.S., yet
“I hope I’m wrong on this one,” Walsh said, “but I don’t think we’re going to see a meaningful federal move next year.”
If the Senate remains under the control of Republicans, led by Sen. Mitch McConnell, Walsh observed, “it’s going to be very hard to get around that firewall that they’ve built.”
Still, Walsh believes there might be other ways to advance full legalization in the U.S., including new legalization initiatives in red states.
– Solomon Israel
(A version of this story first appeared on Marijuana Business Daily.)