While cautious optimism remains regarding federal actions, the industry is poised for growth, fueled by enthusiasm and expanding opportunities in various states.
As we navigate the ever-changing tides of the cannabis industry, the outlook for 2024 feels buoyantly bullish in comparison to 2023. Last year, the economy was at the beginning of a reset. And while things are certainly still settling and still may feel like a bit of a rollercoaster, the industry feels like it’s in a much more positive place as we steer it into the new year.
I’m thrilled to share my insights and predictions with you. I hope they help guide you toward success.
10 cannabis industry predictions for 2024
1 States to watch out for turbulence and growth
While California remains the largest adult-use market, it faces issues like over-taxation and supply problems. The traditional market is still very large, making it challenging for licensed operators. Even some of the larger companies are facing troubles.
In contrast, New York is set to surge with the expected opening of hundreds of retail locations for adult use, attracting new investors and operators. Everyone was disappointed with 2023’s adult-use market, but I’ve been eagerly watching the Empire State, and it’s about to pop off. Aside from having a large population and a cultural epicenter of all things, activity in New York is going to attract lots of capital from the financial center of the universe.
Every state’s story is unique, and this year is no exception.
Florida might see retail saturation impact customer retention. Some of the big public companies that rely on Florida earnings might be in for a little bit of a bumpy ride. Upstart Florida operators like The Flowery and Jungle Boys are chipping away. There is no movement on the recent licensing round until 2025 because those licenses won’t be issued until the summertime. This market will thrive with adult use, but the timeline is unclear.
New Mexico surprised a lot of people with some eye-popping numbers. But their approach to licensing – which is similar to Oklahoma’s – could lead to retail oversaturation and industry consolidation.
Ohio and Minnesota are gearing up for operational adult-use programs by 2025, offering fresh opportunities.
Virginia has been very slow to get its medical program going, but they’ve already passed adult-use. So expect that market to progress, and, depending on the elections in the fall, Virginia could be a great market in 2025 or the new Republican governor could work to stall it out.
A lot of times, our industry looks to new markets to highlight new growth. But in 2024, don’t overlook the established markets like Massachusetts, Michigan, Colorado, Arizona, Nevada, Illinois, and California. Despite being established markets, they present opportunities for disruption and growth. These states already have a lot of consumers, which provides opportunities. And there’s potential for companies to gain market share in these markets.
2 Real cannabis data
Supporting data is a key component of any strategic decision for any business in any industry. Cannabis has been lacking the luxury of clean and relevant data for a long time. There have been top-line state revenue numbers and multiple platforms tracking different interpretations of point-of-sale data, but that’s it. There are no enterprise resource planning (ERP) systems that can do seed-to-sale to give brands good visibility into performance. Retail and production are managed by two different sets of software in larger companies.
Companies will start finding better ways to collect data and use it. Look for companies to start making sense of their data with more sophisticated purchasing and supply chain planning. Look for data around cultivation to improve the outcomes within cultivation.
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3 Revenue-driven job opportunities in cannabis
Last year, it was cultivation jobs that drove job growth. States needed to create the product to get it on the shelves. This year, with more retail openings, there’s a shift towards revenue-generating roles. As companies deploy their wholesale strategy and open up retail doors, expect a rise in hiring for retail leaders, sales, and marketing, or “commercial” positions, as companies expand their retail and wholesale strategies.
4 Addressing high attrition rates and tackling turnover
Here’s a hard truth: our industry faces some serious turnover troubles. There is a certain level of stamina it requires, and 90% of the cannabis workforce is hourly. But there’s a silver lining – companies are getting creative with retention strategies. I’m talking about real investment in training and culture, and I’m all for it.
Companies in cannabis are paying attention to attrition rates. According to engin’s insights report, the average turnover of a retail hourly worker is still high and workers are caring more about workplace culture. 70% of job candidates won’t even apply to a job if it’s with a company with less than 3 stars. As companies realize the high costs of hiring and training – they are pushing to develop stronger strategies to improve retention rates. They’re paying attention to workplace culture and training programs.
Do you need to build or level up your retention strategy? Check out how to build an engaged and happy workforce
5 The poaching game heats up
With half a million people in cannabis, the talent hunt is getting fierce. No matter how good somebody is at their job, there is a learning curve in cannabis, and cannabis companies are recognizing this. The premium on cannabis-specific industry experience is high, which means cannabis companies are likely to engage more in talent poaching. Local competition will heat up, and you’ll see people switching from one retail store to another.
With such high competition and an increase in poaching, this means an increase in turnover rates. I mentioned attrition rates in the last point. Poaching will lead to a need for companies to improve turnover and attrition rates and pay more attention to HR strategies that align with the business goal of lower turnover – including culture, compensation, and workforce development.
People with cannabis experience can apply their skills to new and merging operators. These new companies have an opportunity that many experienced cannabis companies didn’t have… Emerging cannabis companies have the opportunity to hire qualified and experienced employees. New cannabis companies can grow quickly because they have employees that have actually grown cannabis companies before. These companies will more quickly achieve revenue and profitability.
6 Social equity beyond ownership: training for the future
Social equity is evolving. and I’m thrilled to see it. The focus is expanding from just providing licenses to disadvantaged communities to also focusing on job training and removing barriers to people seeking employment in the cannabis industry. This shift aims to prepare more people for employment in the expanding cannabis industry which provides an opportunity for rapid career advancement (Read the economic benefits of legalizing cannabis). This expands social equity opportunities to more people than before, while still providing financial opportunities since cannabis is still a force for upward career mobility. States like New York are leading the charge.
Walk the DEI talk. Don’t just talk about it, start taking action.
7 A shift in policy as states with strict policies find a way to sell THC
The cannabis industry has consistently navigated restrictive environments and has always found a way. Right now, dispensaries are emerging in states with extremely strict cannabis laws, even in states lacking official medical programs. This stems from the 2018 Farm Bill, which legalized hemp-derived cannabinoids like Delta-8 THC – which we all have heard of. Consequently, products containing intoxicating cannabinoids from hemp are increasingly available in states with traditionally strict cannabis policies, such as Texas, various Southern states, and Minnesota.
Beyond Delta-8, other intoxicating cannabinoids are being derived from hemp. Even pure THC is being derived from hemp products which means THC products are entering these markets because of the loophole or taking advantage of uneducated regulators through the “THCa” loophole (THCa distillate does not exist🙃).
As brands work to reach consumers in these areas, we’re witnessing a significant shift in the industry’s landscape. In response to this trend, states like Louisiana and Tennessee are introducing state-sanctioned licensing for businesses dealing in hemp-derived cannabinoids, reflecting a growing acknowledgment and regulation of these products across the United States.
8 Federal moves: a beacon of hope?
While investor sentiment was at a low last summer, it’s expected to improve, especially if the federal government deschedules. Companies could invest more in hiring, Human Resources (HR) systems, and write off their business expenses like marketing. But while we’re all on the edge of our seats to see what the federal government will do next, the industry remains cautious about relying on the feds and is keeping expectations low – this industry certainly is not sitting around waiting for change. We’re spearheading change by taking the reins any way we can. But, of course, any positive federal developments in early 2024 could further boost the industry’s outlook.
9 Salaries will rise!
Dare I say it? But expect salaries to rise! As our industry gets back on its feet and as competition for talent heats up, those paychecks are bound to get heftier. If for no other reason than inflation. A year ago, some people in cannabis felt lucky to have a job and a paycheck. As the industry revitalizes, competition and poaching heat up. Expect salaries to increase in this industry over the next 12 months.
10 Rekindling our ‘why’
2023 was a tough year for the cannabis industry, marked by declining revenues, falling stock prices, and widespread layoffs. However, a shift began late in the year following Secretary Becerra’s rescheduling recommendation from the Health and Human Service (HHS), sparking renewed optimism. Heading into 2024, there’s a palpable sense of excitement.
This renewal hinges on rediscovering the core purpose of ‘why’ people in the cannabis industry. It’s about recognizing the opportunity to make a positive impact by providing access to this plant. The industry is now entering 2024 with renewed enthusiasm and ready for growth, especially with states like New York expanding programs and Ohio opening new retail opportunities.
Driven by a reinvigorated spirit and a clearer vision…
The cannabis industry is on the brink of a significant resurgence in 2024, following a challenging period. This revival is not just about financial recovery or market expansion – it’s deeply rooted in reconnecting with the fundamental reasons we are all here. It’s about the collective mission to positively impact lives through cannabis. While cautious optimism remains regarding federal actions, the industry is poised for growth, fueled by enthusiasm and expanding opportunities in various states.
Take these cannabis industry predictions with you as we step into 2024. The cannabis industry stands ready to embrace its potential, driven by a reinvigorated spirit and a clearer vision for the future.