Shifting Cannabis Regulations Signal New Potential for the Industry
The cannabis industry experienced uplifting news after the U.S. Food and Drug Administration announced it is expediting processes to address the matter regarding cannabidiol or CBD. FDA Principal Deputy Commissioner and Acting Chief Information Officer Amy Abernethy announced in a series of tweets that the matter is an "important national issues with public health impact." Moreover, Abernethy says that the FDA is enthusiastic about researching regarding the therapeutic benefits of CBD products. Similarly, former FDA commissioner Scott Gottlieb also made it a goal to expedite research regarding CBD. The conjoined efforts of the public and the FDA ultimately led to the passage of the U.S. Farm Bill and the descheduling of CBD by the U.S. Drug Enforcement Administration. Additionally, the FDA approved the use of Epidiolex, a CBD-based drug, to treat epilepsy common among children. Following the passage, CBD products rapidly emerged throughout the U.S. from local brick-and-mortar stores to giant e-commerce portals. However, the FDA has made it clear that the addition of CBD in foods and beverages is still prohibited. Nonetheless, consumers can still obtain these health and wellness products containing CBD in some areas. Furthermore, CBD has also become prevalent in nations such as Australia, Chile, Colombia, France, Germany, and Spainas they have legalized cannabis for medical applications. Primarily, most of the regions are using CBD to treat patients suffering from conditions such as multiple sclerosis, cancer, chronic pain, epilepsy, and depression. While the CBD marketplace is thriving globally, the THC market is experiencing growth in regions where recreational cannabis is legal. Overall, the combination of the two markets is causing the broader cannabis industry to undergo exponential growth and development. According to data compiled by Mordor Intelligence, the global cannabis industry was valued at USD 14.5 Billion in 2018. By 2024, the market is expected to reach USD 89.1 Billion while registering a CAGR of 37% during the forecast period from 2019 to 2024. MediPharm Labs Corp. (OTC: MEDIF) (TSX-V: LABS), Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON), Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB), The Green Organic Dutchman Holdings Ltd. (OTC: TGODF) (TSX: TGOD), Charlotte's Web Holdings, Inc. (OTC: CWBHF) (TSX: CWEB)
With 10,000 Licenses Issued, California Reflects the Growing Power of Hemp
As hemp production increases, Californian legislators have extended the duration of thousands of cannabis cultivation licenses to support the state's thriving industry.
Alcohol Consumption Drops With Cannabis Legalization Abound
The steady decrease in alcohol consumption has led consumers to find new alternatives. And specifically, the rise of cannabis is directly correlated with declining alcohol consumption rates. Investment bank firm Cowen & Co. reported that legal adult use cannabis states witnessed binge drinking rates fall by 9% below the national average, and 11% below non-cannabis states. However, newly added states such as California and Nevada currently have higher rates of binge drinking intensity and lower levels of cannabis consumption. As a result, Cowen said it is reasonable to assume that as more states legalize adult use cannabis, the alcohol binge drinking rates will begin to falter. The Centers for Disease Control and Prevention estimated that 17% of the U.S. population engaged in binge drinking, meaning that 1 in 6 reported doing so 4 or more times a month. In states that legalized adult use, the number of binge drinking sessions per month was 9% below the national average. In particular, many millennials have opted to consume cannabis over drinking alcohol. For instance, according to a MarketWatch article, a millennial said that she prefers to consume cannabis over alcohol because it saves her more money and doesn't cause intoxicating effects of alcohol. According to a Yahoo News poll in 2017, it was concluded that the majority of the 55 million recreational marijuana users in the U.S. are millennials. Meanwhile, a national survey conducted by the Monitoring the Future Study uncovered that the share of college students drinking alcohol daily fell from 4.3% in 2016 to 2.2% in 2017. Furthermore, Cowen & Co. analysts project the U.S. cannabis market to reach sales of approximately USD 75 Billion by 2030. And while the U.S. accounts for a majority of the global cannabis market share, other regions are rapidly emerging and witnessing faster growth rates. Pasha Brands Ltd. (OTC: CRFTF) (CSE: CRFT), Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB), Aphria Inc. (NYSE: APHA) (TSX: APHA), Organigram Holdings Inc. (NASDAQ: OGI) (TSX-V: OGI), The Green Organic Dutchman Holdings Ltd. (OTC: TGODF) (TSX: TGOD).