What to Expect in Cannabis Retail in 2021
Changes in purchasing behaviors
2020 was a very interesting year for the cannabis industry. Due to the COVID-19 pandemic, cannabis dispensaries and cannabis delivery services experienced a handful of economic ups-and-downs. In March of 2020, a national emergency was enacted in response to the pandemic. Cannabis dispensaries and cannabis delivery services were marked ‘essential’ by their respective municipalities. Additionally, cannabis delivery services saw a huge increase in cannabis sales. Some of these figures were upwards of an astonishing 20%. As the restrictions associated with the pandemic are expected to lighten, so will the changes in buying behaviors.
Setbacks in compliance enforcement
2020 saw a massive expansion within the cannabis industry for a handful of states in America. These states are New Jersey, Montana, South Dakota, Vermont, and Arizona. Some of these states offered some form of accessibility to cannabis, and the others are entirely new to becoming a ‘green state.’ As great as this is for cannabis companies and patients in these markets, the next step is to ensure a high compliance level for both parties. This stage is known as the ‘enforcement phase.’ Let’s take a look at what these newly-legal states can expect within the next year or two. Additionally, other locales are reviewing enforcement and compliance concerns in 2021 as well, specifically Canada. 2021 marks the first review of the Cannabis Act by Canada’s Minister of Health et al. Expect this to be a theme all year long.
Banking adjustments in 2021
Cannabis companies based in the United States currently have minimal-to-no dedicated access to essential banking services. The SAFE Banking Act includes loans, credit lines, and even requiring simple checking accounts. Due to financial institutions requiring to report to the Federal Deposit Insurance Corporation, or FDIC, and the FDIC is a federally-created agency, credit unions and banks fear the potential criminal and financial consequences of aiding cannabis companies. This wall has made cannabis an industry ruled strictly by cash, a prominent security concern, and a massive roadblock to expanding a business. As the SAFE Banking Act Passes, this will open new doors, accounts, and a realm of possibility for cannabis companies today and tomorrow.
Moreover, it’s been hinted that although Republicans in the Senate are open to discussion as well as a vote on the SAFE Banking Act, this may end a compromise that may not mirror the original bill just passed by the House. To convince the Senate Republicans to hear the issue and vote in favor of the banking reform, particular modifications may be made. This could be modifications such as including protections for CBD and hemp companies and possible prerequisites that federal agencies won’t be allowed to target specific industries without an upstanding cause. Even Senate Democrats may push back on the SAFE Banking Act. Similar to the pushback led by the minority of the House, a few Senate Democrats believe that it’s not sensible to consider reforming current cannabis banking laws before grander cannabis reform issues such as legalization and decriminalization are tackled at the federal level.
Supply chain interruption
Another byproduct of the COVID-19 pandemic has been the disruption in the supply chain. When you consider COVID-19 and a few notable mergers and acquisitions, the supply chain in the cannabis industry is sure to take a hit. Some of the most significant mergers and acquisitions include Verano Holdings and AltMeds, and GW Pharma and Jazz Pharma. More than billions expect to change hands between the companies mentioned above, causing a slight delay in the supply chain. Despite this, the cannabis industry is still on course to exceed $200 billion by the end of 2030.