2019 was the most pivotal year to date in the cannabis industry. There was hype, there was crisis, there were scandals. The unstoppable march of legalization continued. CBD became a household word. The industry developed and matured, but not without notable setbacks. In this post, we take a look back at some of the biggest stories to break across the North American cannabis industry in 2019.
The Vape Crisis
Touted as a healthier way to consume cannabis (and nicotine), vaping was rapidly stealing market share away from dried flower as a cannabis consumption method. At least, that was the case until earlier this year when a strange lung illness started afflicting thousands of people and ultimately killing more than 50. The link to vaping was discovered quickly, but beyond that scientists were stumped. After months of no apparent leads in finding the cause, it was determined that vitamin E acetate, mostly found in black market THC vapes, is the main culprit.
The First Cannabis Consumption Lounge Opened
Talked about since the early days of cannabis legalization, public places where cannabis use was legal has always been on the agenda for activists. Despite a variety of gray-area laws and regulations that technically made these establishments legal in certain places as far back as 2016, they didn’t manifest into reality until this year. The barrier was finally breached in October by a cannabis cafe in LA called Lowell Farms Cafe. Only two weeks later Nevada got its first, and we predict that dozens more will be established in 2020.
https://abcnews.go.com/US/cannabis-cafe-opens-today-los-angeles/story?id=65977547
https://lasvegassun.com/news/2019/oct/12/nevadas-first-consumption-lounge-opens/
Canada Legalizes Extracts, Edibles, and Topicals
On October 17, 2019, the Canadian government stayed true to its word and opened up the market to new product categories a year after dried cannabis flower (and a few other limited products) were legalized for recreational use nationwide. Extracts of all kinds (including CO2 oil commonly used in vaporizers), edibles, beverages, and tinctures were all included in this most recent round of legislation. This move vastly expands accessibility to cannabis products, and will help de-stigmatize the cannabis plant which is often (and of course incorrectly) only associated with smoking. It’ll also be a great new line of business for Canadian cultivators who had many, many challenges throughout 2019.
https://www.cbc.ca/news/canada/british-columbia/cannabis-edibles-bc-1.5321886
First Nation-Wide Legal Hemp Harvest
The first 50-state hemp harvest occurred in the US this fall since the passage of the Farm Bill in 2018. Unfortunately, the hype didn’t live up to the reality for many hemp farmers. The harvest was plagued by problems including bad weather, a drop in market demand, and speculation. That’s not surprising when you consider that the crop hasn’t been farmed on a large scale in nearly 80 years. We’re confident that next year will bring better results, and that the trend will continue as hemp farming develops into an established commodity crop.
CannTrust Scandal
The legal cannabis market is built on consumer’s trust that producers act in good faith. If consumers don’t trust the legal cultivators, they’ll simply turn back to the illegal market. In 2019 there were a number of Canadian Licensed Producers that were penalized by regulators, including Bonify and Agrima who both had their licenses revoked. Maybe none was as shocking as the CannTrust scandal, who had up to this point been seen as a stable, successful company that focused more on efficiently growing quality product and less on press releases designed to impact stock valuations. It was revealed in June that CannTrust had been illegally growing in unlicensed grow rooms since 2018. Not only that, the CEO and second-in-command both knew about it and did nothing. The meltdown that followed was shocking. With cultivation and sales being halted, the executive team being fired, and the company’s valuation dropping to a fraction of what it once was, it remains to be seen whether their license will be revoked entirely.
Michigan, Illinois and Maine Go Rec Legal
More dominos continue to fall in the rollback of prohibition. Michigan, Maine, and Illinois all made the move to join the growing number of states that have legalized recreational use of cannabis. Sales this year kicked off in Michigan, and the revenue and business boost is expected to be a big help for the severely depressed Detroit metropolitan area. Illinois passed their legislation well over a year ago, but kicked recreational sales off on January 1, with the Lieutenant Governor being one of the first to make a purchase. Maine actually passed their adult-use legalization bill in 2016, and after repeated holdups from their governor, the license application process was finally opened up at the end of 2019. LA is legal, Chicago is now legal, when New York inevitably goes rec legal within the next two years, the wave will only speed up.
https://marketrealist.com/2019/10/marijuana-in-maine-adult-sales-pick-up/
https://chicago.suntimes.com/cannabis/2020/1/1/21045915/legal-marijuana-recreational-pot-illinois-dispensaries-first-day-open
https://www.detroitnews.com/story/business/2019/11/29/recreational-marijuana-sales-michigan-what-you-need-to-know/4308203002/
The CBD Craze
CBD became a household word in 2019. Despite the limited science and research behind CBD’s usefulness in medicine, it’s been touted as everything from a cure to cancer to a complexion-enhancing beauty product ingredient. From CBD-infused burgers to pet treats, it has truly invaded our culture. Search trends from Google indicated that it hit a fever-pitch in May of 2019, which saw more than double the previous year’s searches for "CBD."
https://abcnews.go.com/Business/inside-wild-west-cbd-products-industry/story?id=67467783
There’s no doubt that 2019 was a big year for cannabis. And it’s a virtual certainty that 2020 will be even bigger, with adult-use legalization on the horizon for another six states. We’re excited to be a part of this industry, and to continue to expand our contribution over the next 12 months. Happy new year!
