On the first day of MJBizCon in Las Vegas, industry operators, investors, and would-be entrepreneurs convened to discuss the state of the industry, as 2019 proved to be a harsh reality check for an industry that was just starting to gain some steam in the U.S. and abroad.
In his opening presentation, Chris Walsh, president and incoming chief executive officer at Marijuana Business Daily, delivered a recap of significant trends, developments, and growing pains in 2019 across the U.S. cannabis industry, and also highlighted reasons behind the bubble bursting in Canada and why investors are taking a more cautious approach moving forward. New York and New Jersey flopped in their legalization efforts, he said, while Ohio and West Virginia got off to a rocky start due to onerous regulations, and Nevada created a multi-agency task force to “root out corruption or criminal influences” in the state’s legal cannabis market.
Walsh also pointed to a few highlights and surprises in newly-regulated states, and the rise of the Midwest as a major player in the industry. Oklahoma, which launched its medical program this year with a free-market approach and low barriers to entry, has already registered 200,000 patients and enjoyed $350 million in sales. Michigan is also off to a strong start, he said, and projects to be a $1.5B market, while Illinois will become the second-largest state in the country to have a recreational market and 500 retail stores opening in 2020-21. Meanwhile, in California, cannabis companies continue to struggle with a challenging business and regulatory environment and the competition from the illicit market, and the vape crisis put a damper on sales across the U.S. and Canada.
Walsh made a few predictions for 2020, which included: crackdowns in taxes, corruption, and safety; headwinds in international markets, possibly Columbia and Latin America; California’s industry is going to get worse before it gets better; and, Canada’s industry will stabilize by the end of the year.
Marc Randolph, co-founder and original CEO at Netflix, delivered the day’s keynote, offering words of wisdom and advice from his four decades of entrepreneurial experience. Netflix has grown to more than 150 million subscribers worldwide, and Randolph said the key to his success was constantly coming up with new ideas—no matter how silly, far-fetched, or feasible—and then testing those ideas in real time as the company grew and transformed. When he looks at the cannabis industry today, where he has made several investments, he advises entrepreneurs they should view the barriers and challenges as a unique and limited opportunity.
“Right now, I know it’s complicated and it is a shifting landscape…but we all know, that is what’s keeping a lot of big huge established companies out for the time being. And that is the window of opportunity and that is what is so exciting is having this field to ourselves,” he said.
Randolph also advised entrepreneurs to embrace the risk that is inherent in the industry, and remember that “nobody knows anything” (a quote from screenwriter William Goldman) when it comes to new business opportunities and their likelihood of success.
“The risk that comes from starting down a trail where you can’t quite see around the corner, where you don’t know what the future’s going to bring,” he said. “You’ve got to be willing to start before you can see because, if you don’t, I guarantee someone else will be there before you.”
On the exhibition floor, vendors from across the United States, Canada, China, Israel, Spain, Italy, the Netherlands, and more were on hand to showcase the best and newest products for every facet of the cannabis space. Among some of the greatest standouts of the day were new products from Kanvas, dr.dabber, and mood33, and the recently launched Cannabis Guide system from Leafly.
A first of its kind according to Director of Marketing Kristin Archer, Kanvas’s new Klip disposable vaporizer combines patent-pending “Vapetelligence” battery technology with state-of-the-art, child-resistant design. The certified push-and-turn mechanism effectively disables vape operation in one simple motion and a small LED window illuminates to indicate placement of the child-lock feature.
At dr.dabber, associate Daniel Marshall was on hand to demonstrate the company’s newest line of CBD distillate vape cartridges. Complete with color-matching universal batteries, the line includes four THC-free blends: Original in blue, Citrus in orange, Fresh in green, and Robust in a bright shade of purple. Carts and batteries come individually or in a combo set. The products are lab tested for quality and packaging includes a scannable QR code with batch-specific lab results.
Samples flowed freely at mood33 where staff maintained a steady pour of the company’s newest beverage collection. Each containing 33mg CBD, the six THC-free formulations include Joy with peach and yerba mate; Peace with watermelon, mint, and basil; Calm with lavender and chamomile; Energy with raspberry, lemon, and green tea; Passion with passion fruit, hibiscus, and lime; and Wellbeing with blueberries, hops, and reishi mushrooms. Calorie content varies between sixty to seventy calories per 12oz resealable aluminum bottle.
Marketing and education took center stage at Leafly where the company’s new Cannabis Guide system was the star performer. Utilizing an assortment of flash cards, staff explained the new system which uses lab-sourced data and proprietary software coupled with more than one million customer-generated reviews to create a “significant expansion of the language of cannabis” through color coded shapes representing dominant cannabinoid profiles of popular strains.
“Cannabis has unique physiological effects for each of us. As our understanding of cannabis grows, so does our need for a more sophisticated, yet intuitive language to help people navigate the very personal effects cannabis has,” said Leafly Chief Executive Officer Tim Leslie when the guide first launched. “While indica, sativa, and hybrid are a starting point for understanding cannabis, this form of categorization doesn’t take advantage of our growing understanding of the effects of the various compounds found within the plant. With the Leafly Cannabis Guide, our team of Leafly scientists and visual designers have distilled this all down to an intuitive visual language that will help people understand cannabis better and find the right cannabis for their needs, whether enjoyment or wellness. It’s an exciting step forward for those seeking cannabis.”