My top 10 2025 Cannabis Predictions

"Those who have knowledge, don't predict. Those who predict, don't have knowledge. " Lao Tzu, 6th Century BC Chinese Poet

I wouldn’t necessarily go that far but Lao Tzu’s maxim shouldn’t be taken lightly.

In cannabis, it is easy to predict ‘what’ will happen but much harder to predict ‘when’ The latter is a more germane consideration for 2025.

Here is my obligatory list of 2025 predictions.

On a broad level, North American cannabis will see continued fragmentation, scare capital availability, regulatory uncertainty and ongoing margin pressures.

THE INDUSTRY

1) Rescheduling will finally happen in Q3/Q4

2) SAFER banking

Trump has signalled support, but passing SAFER in a Congress riven by partisan politics is a coin flip. At any rate, the legislative details are what really matter and those wouldn’t be known till the 11th hour of a Senate vote.

3) 2018 Farm Bill.

It just received a 1-year extension but don’t be surprised if there are even more delays due to congressional turmoil. In the meantime, count on other States to ban hemp derived THC and THCA products.

4) Pennsylvania will become a legal adult use market, with a roll out in 2026

5) Consolidation will accelerate but mostly through divestitures, evaporations and wind ups.

M&A will be selective (it is tough to do deal these days) and creative (the Vireo roll up). I see OGI’s acquisition of Motif Labs as a one-off strategic deal.

6) Round 2 of the Florida adult use referendum will not happen in 2025.

7) Opportunities abound in the areas of private credit (refinancings) and distressed assets. Growing international markets will absorb more LP exports. Consumption loungers will start to take off in the U.S.

FOR COMPANIES

8) More SKU rationalizations are in the cards at the large players.

There’s just not enough cash flow and resources to support the thousands of ‘me-too’, underperforming products.

9) Outsourcing arrangements pick up steam

Management is coming to the realization that focus is critical for excellence if not survival

10) Accelerated pace of product innovation

Innovation will be key to driving growth in 2025 as much of the market stagnates and price compression hits rock bottom.

Savvy operators will tap emerging consumer trends. For example, minor cannabinoid ratio product sales are outpacing THC only sales.

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