Recent analyst reports estimate that the global legal marijuana industry will reach more than $20B by 2025.
Medical marijuana is already legal in more than half the United States, and eight states (plus Washington DC) have legalized marijuana for recreational use. It’s soon to be fully legal in all of Canada.
There’s also been a large uptick in public and private investment in new, safer forms of ingestible marijuana, while cannabis startups — focused on everything from therapeutics applications to cultivation techniques — are also cropping up. Financing to cannabis companies more than doubled in 2017.
Now, more traditional industries, including medicine, banking, agriculture, building, and others, have either begun or will begin incorporating cannabis into their products and R&D.
We take a look at 18 industries likely to be impacted first.
Cannabis is revolutionizing the way several ailments are being treated worldwide, especially in the United States.
Researchers are increasingly studying chemicals found within cannabis — cannabinoids — to discover new medical applications.
Today, some of the most well-known cannabinoids are tetrahydrocannabinol (THC), cannabinol (CBN) and cannabidiol (CBD). CBD in particular has drawn the attention of several researchers, many of whom are studying its impact on epilepsy, neuropsychiatric disorders, cancer, anxiety, and other conditions.
Recently, the FDA approved the use of CBD to treat two types of epilepsy.
Legalized medical marijuana is also helping supplant opioid treatment of chronic pain. In one medical marijuana study, 80% of users said the drug helped reduce chronic pain, and 50% of those had previously been treated with opioids. That has resulted in falling opioid prescriptions in states where marijuana is legalized.
Over 100 cannabinoids have been found within the plant, and as research continues, medical applications could become widespread.
With the influx of medical marijuana prescriptions, the pharmaceutical industry is likely to take a big hit — to the tune of nearly $4B per year, according to one study by the University of Georgia.
Cannabis is increasingly seeing applications in the treatment of pain, anxiety, sleep disorders, and other medical conditions.
As a result, many pharmaceutical companies are attempting to incorporate cannabis into their strategies. PharmaCannis, a New York-based medical cannabis company, is using a self-emulsifying drug delivery method to produce its PharmaCannis Capsules, increasing the efficacy of its plant-derived medical marijuana products.
GW Pharmaceutical, a global leader in developing cannabinoid-based medicines, recently made history when it received FDA approval of its marijuana plant-based prescription drug, dubbed Epidiolex.
Also recently, British Columbia-based medical marijuana producer Tilray announced a partnership with Sandoz Canada (an arm of Norvaris), the first known affiliation between a marijuana producer and a major pharmaceutical company.
3. Wellness & beauty
Cannabis applications across the wellness and beauty sector are rapidly emerging. CBD oil in particular is attracting a lot of attention.
The oil is non-psychoactive (read: won’t get you high), and proponents claim it can offer relief from pain, anxiety, and depression. It also possesses anti-inflammatory and anti-acne properties.
One potential wellness application of CBD oil is for athletes and those looking to boost workout results, as some have claimed CBD oil can reduce post-exercise inflammation and promote muscle growth.
It’s also making its way across beauty & makeup, including mascara and lip balms. Lord Jones makes CBD gummies and a popular body lotion for “sore muscles, joint pain, and skin conditions.”
Already, CBD oil has some high-profile backers: Olivia Wilde recently said that she used it to relieve physical aches during a Broadway run. And fashion stylist Karla Welch, who works with Wilde, Ruth Negga, Katy Perry, Sarah Paulson, and more, uses Lord Jones CBD lotion on her clients’ feet when they walk the red carpet.
Thanks to increased legalization, cannabis is becoming more openly integrated into consumer products — especially those focused on wellness & beauty.
The increasing legalization of cannabis has led to a heyday in the packaging industry.
Packaging for cannabis products is highly regulated, with requirements for child-resistant and resealable lids, tamper-proofing, and opacity.
Formats also vary for different types of cannabis, from cannabis flowers in glass jars to concentrates in heatproof, borosilicate glass and polystyrene containers to edibles in resealable smell-proof bags.
This has led to new companies flooding the market to meet the specific demands of the industry.
Beyond Ziploc-like products, many have embraced pot-packaging innovation and created tins, slide boxes, blunt tubes in different colors, little jars that look like contacts cases, and tamper-resistant dropper bottles.
Companies have even started to reimagine the traditional pill bottle to fit the pot industry’s needs, offering products like a bottle with a walnut (or bamboo, or ash) screw top instead of the traditional white plastic. Truong’s black glass jar protects against sun exposure.
As cannabis legalization increases, companies will need to learn how to further distinguish their packaging from other mainstream consumer products on the shelves. They will also need to consider how to effectively communicate THC dosage levels on products.
While companies might find it challenging to maintain transparency and quality (and still remain unique), packaging innovation could help boost product sales for brands looking to dominate the marketplace.
The banking industry for the most part is dominated by a few large, nationwide banks, many of which are reluctant to provide loans and bank accounts to cannabis businesses, since marijuana is still illegal federally.
As a result, smaller, localized banks and credit unions are bridging the gap, giving legal cannabis companies an alternative to dealing in straight cash.
In fact, more than 400 local banks and credit unions have marijuana-related clients, a number that has more than tripled since 2014.
Maryland-based Severn Bancorp, for example, charges higher-than-normal fees for cannabis accounts, hitting as much as $3,000 to open an account plus monthly fees of $1,750, according to The Washington Post.
Partner Colorado, a credit union in Arvada (near Denver), provides checking accounts expressly for the marijuana industry. In just three years it has established itself as the marijuana industry’s biggest banker, with clients depositing $931M in 2017.
Cannabis legalization could be revolutionary for banks and businesses alike. The state of California even toyed with the idea of creating its own state-chartered bank to handle marijuana businesses’ funds, though the bill was eventually killed.
Beyond the initiatives of smaller banks, numerous new cryptocurrencies are popping up in order to fill the gap that traditional banking methods are creating.
Seattle-based company Düber, for example, aims to help cannabis companies struggling to secure bank accounts. It is planning a new cryptocurrency called dübercoin that will enable more efficient transactions between cannabis consumers and retailers.
Additionally, technology companies like SinglePoint and POSaBIT are working to generate a payment method for dispensaries and consumers using bitcoin.
In recent years, some cryptocurrencies have cropped up specifically for cannabis transactions, like PotCoin and HempCoin.
For a market that operates mostly on cash, cryptocurrencies could increase security around transactions and improve money management. And with legal marijuana-related companies dealing with $50,000 to $75,000 in pure cash transactions per day, the upside to the cryptocurrency space is considerable.
Hemp is a variety of cannabis plant (like marijuana is) known for its low THC levels. Hemp requires half as much land as cotton to produce a ton of finished textile. Subsequently, it’s changing the landscape of the agricultural industry.
Hemp can be woven into light materials for clothing, durable textiles for commercial industrial purposes, and even very strong ropes and cables for heavy lifting and pulling. Unlike cotton, hemp holds its strength when wet, and it also possesses anti-bacterial properties.
While CBD oil products are currently the biggest market for hemp growers in the United States (Future Farm reported $90K per acre in revenue in 2017), more than 25,000 other products can be made from hemp, including food, fabrics, building materials, ethanol, and biodiesel.
It can also grow quickly in different soils and temperatures, making it a flexible resource for farmers to leverage.
Hemp could also help with water conservation, as “it becomes one of the most drought-tolerant crops on the planet,” according to the National Hemp Association.
For the multi-billion dollar legal marijuana industry, which currently deals in mostly cash & in-person business, e-commerce is the next frontier for retailers.
Companies are flooding the space with new e-commerce solutions specifically aimed at supporting the cannabis industry.
Meadow, for example, is a site that allows consumers to get a prescription for medical marijuana over video chat and order from a nearby shop that delivers. Baker’s Shop, dubbed the “Shopify for Cannabis,” aims to deliver an e-commerce solution that can help retailers establish online storefronts.
Speaking of Shopify, the Canadian e-commerce giant itself is getting into the legal-weed industry, and will handle online sales for the Canadian province of Ontario’s cannabis market in partnership with the Ontario Cannabis Retail Corp.
E-commerce provides an avenue for cannabis retailers and shoppers alike to transact on a digital platform, allowing businesses to scale faster and more efficiently.
9. Billboard advertising
Cannabis billboards are becoming increasingly common, at least in states where it’s legal.
Part of their popularity is rooted in state law: billboards offer a way for shops to skirt state regulators’ limits on signage at retail locations. In some states, marijuana retailers may only have a certain number of signs on their own property. (For example, retailers in Alaska can only have 3.) As long as a billboard isn’t on a retailer’s property, it doesn’t count against signage limits.
In August 2014, Seattle-based cannabis producer Dàmà unveiled what was widely billed as the nation’s first-ever billboard campaign by a cannabis business.
In Los Angeles, MedMen, one of the stores “mainstreaming marijuana,” implemented mobile billboards, employing trucks to drive around the city wrapped in advertising, in addition to featuring the same ads on billboards across the city.
Beyond traditional billboard advertising, the online world could see an influx of advertising as legalization increases. Cannabis businesses are currently excluded from paid advertisements on popular platforms such as Facebook, Twitter, and Google. As legal cannabis becomes more mainstream, we could begin to see more digital advertisements, commercials, and other forms of marketing.
The food industry has seen cannabis edibles take off over the last decade.
Consumers in California purchased $180M worth of cannabis-infused food and drinks last year, which amounted to 10% of the state’s total marijuana sales. That percentage rose to 18% in February 2018, according to Green Market report.
And it’s not just California that’s seeing a growing edibles market. Sales of pot-infused treats increased 121% in Washington state, where recreational marijuana is legal, in 2016. And since Colorado first allowed recreational marijuana use, sales tripled from $17M in Q1’14 to $53M in the Q3’16.
Dixie Elixirs was one of the first companies to enter the market. This Colorado-based company sells marijuana-infused products such as truffles, chocolate bars, mints, juices and many more.
Now, other companies are popping up as well, including Mirth Provisions (cannabis-infused edibles and drinks), Auntie Dolores (cannabis oil snacks), Defonce Chocolatier (a high-end chocolate company), and Cheeba Chews (chocolate taffy), to name a few.
Alcohol consumption is declining globally. In response, beer, wine, and spirits companies are looking to expand their offerings, including through cannabis-based beverages.
UK-based spirits maker Diageo, whose brands include Smirnoff, Johnnie Walker, Guinness, and Bailey’s, has been holding discussions with at least three Canadian cannabis producers about a possible deal for a pot-infused drink, according to a BNN Bloomberg TV report.
Constellation Brands recently announced a $4B investment in cannabis company Canopy Growth, raising its stake from just below 10% to 38%.
Additionally, various cannabis-based drinks are looking to rival the appeal of beer. And beer companies are taking note, partnering with marijuana businesses to create special brews.
For example, California-headquartered Lagunitas Brewing Company announced the launch of two psychoactive sparkling water products.
Perhaps no industry is more affected by the legalization of marijuana than the tobacco industry. Similar to alcohol companies, tobacco brands could pivot to increasingly incorporate cannabis in their products.
This summer, Imperial Brands and Snoop Dogg-backed VC firm Casa Verde jointly invested $10M in British medical marijuana research firm Oxford Cannabinoid Technologies. US tobacco company Alliance One International bought an 80% stake in Goldleaf Pharm Inc., a pot grow facility in Canada.
Philip Morris Product SA , the Swiss-based subsidiary of cigarette and tobacco manufacturing company PMI, even holds a patent for improving GMO systems for growing marijuana.
As more states legalize marijuana, the intricacies in each state’s laws have buoyed a budding industry: cannabis lawyers.
The National Cannabis Bar Association, formed in 2015, now has 400 members, and firms continue to shift their practice to focus on the industry.
With widespread industry adoption on the rise, laws will have to be enacted and interpreted for both consumers and enterprises. Cannabis-focused lawyers could advise on everything from advertising strategies to consumption levels to business practices, and more.
14. Textiles & fashion
With consumers willing to spend 20% more for eco-friendly products, big retailers and niche fashion brands are banking on hemp to increase their bottom line.
While hemp often scores points for its durability and rapid growth without excessive use of water and pesticides, it does not dye as well as cotton, and not everyone appreciates its linen-like and sometimes scratchy feel.
But manufacturers, including Colorado-based EnviroTextiles, are introducing new hemp-based textures that look like denim or wool. Other companies that make hemp clothing include yoga brand prAna (owned by Columbia Sportswear) and outdoor brand Patagonia.
Hemp is even going high fashion with apparel brands such as Bad Decision Adventure Club — though it’s still a ways from being truly mainstream.
With the increased legalization of cannabis, fashion brands could take advantage of the largely unbranded space to spark mainstream acceptance of cannabis.
Celebrities and influencers, especially, have the ability to promote a less stigmatized view of cannabis by wearing and sharing hemp-based designs.
While plastic is extremely versatile and relatively inexpensive, much of it isn’t biodegradable, posing an ongoing threat to the environment.
Fixing this problem could present an $80B — $120B opportunity. And hemp companies are popping up to capitalize.
Hemp could provide an alternative and more eco-friendly alternative to plastic, impacting manufacturing of everything from bottles to household appliances to toys, and more.
Best Practices Packaging, an eco-packaging developer in Alaska, says it is ready to ramp up production on a wide range of applications for hemp-based plastics. The company is working with long-time partner Penta5, a Florida-based group of companies that has the capacity to co-pack over a billion units a year.
Additionally, Lego has committed to switching to more sustainable materials than plastic. Its $150M investment to do so could potentially be used to explore a hemp-derived plastic.
16. Biodiesel & energy
Hemp thrives even in poor land and requires minimal inputs, and still produces nearly four times as much oil per acre as soybeans, which is currently the only crop grown on a large scale for biodiesel in the US.
Researchers at UConn have found that industrial hemp has properties that make it viable and even attractive as a raw material for producing biodiesel (sustainable diesel fuel made from renewable plant sources).
The researchers plan to build a pilot biodiesel production facility using a $1.8M grant from the Department of Energy. The main use of the facility will be to test new ways to produce biodiesel, and the reactor will be capable of producing up to 200,000 gallons of biodiesel per year.
Using hemp as a fuel/energy source could also greatly reduce the levels of carbon produced by more standardized fossil fuels.
The world consumes around 400M tons of paper every year, using an average of 17 trees to produce each ton. However, an acre of industrial hemp produces quadruple the paper that one acre of trees can.
Companies like TreeFreeHemp (part of the Colorado Hemp Company) in Colorado and Green Field Paper Company of California sell paper made from hemp, using as many locally sourced materials as possible.
Down the road, hemp could help sustainability efforts geared towards reducing deforestation.
Hempcrete is a lightweight, cementitious material made with industrial hemp hurds (woody fibers from the plant core), lime, and water. Hempcrete may come in modular blocks similar to concrete masonry units. And it has the potential to shake the building material industry at its foundation.
Hempcrete can fill the roles of OSB, insulation, and drywall, according to distributor American Hemp. The first modern hemp residence was built in 2010, and some 50 houses now exist in the US.
Interest in hemp as a building material is now spanning the globe.
Washington state-based company Hempitecture is retrofitting homes using the material, while Left Hand Hemp in Denver completed the first permitted hemp structure in Colorado last year. Ukraine is home to Hempire, while Nepal has Inno-Ventures. Israel’s first hemp house was constructed in March, on the slopes of Mount Carmel.