Some Cannabis Musings for 2024
"Those who have knowledge, don't predict. Those who predict, don't have knowledge. " Lao Tzu, 6th Century BC Chinese Poet
I agree but my readers wanted some thoughts on 2024, so here goes.
Our sector must deal with very complicated issues. Unsurprisingly, they don’t lend themselves to simple or clear-cut prognostications,
1. US regulations are anyone’s guess
I give Rescheduling a 75% probability and SAFER a 50%. They should be higher but:
- Anything is possible in today's political climate, especially entering an election year.
- As they say in the tech industry “never confuse the sale with the implementation” Politics is the art of compromise – and last-minute legislative trade-offs. Whatever reform comes to pass, it won’t be good for every firm and State.
- More importantly is ‘when’ will change occur. Right now, this is anyone’s guess.
Understanding the implications of Rescheduling is like playing 3-dimensional chess. What will pharma companies do after S3? How will the Feds enforce S3, treat state operators and view the disparate regulatory frameworks?
With SAFER, getting the final few GOP supporters will require last-minute horse trading and a Senate vote – if that’s even on the agenda. At this stage, any prediction is a coin flip.
2. New markets spur growth
Major States like New York and Ohio are now open for business. However, growth will start off slow owing to the usual dumb (i.e. government) reasons and the strength of the illicit market. The 2024 ‘X Factor’ is Florida’s adult use legalization. The ballot confirmation is expected April 2024. California has seen its market nadir and should get on to a (hopefully) profitable growth trajectory.
EU adult use expansion, led by German and Dutch pilots, will finally happen albeit with modest results. Israel and Australia will continue their solid medical growth rates. Poland and UK growth rates will pick up steam.
3. Canada will be more of the same
The market will continue to grow, but don’t expect any serious reform out of Health Canada. LPs will remain under pressure due to margin compression and excessive capacity & inventories. Some will be shut down by CRA for not paying taxes. Expect many more bankruptcies and some noteworthy zombie mergers.
To cope with these choppy, uncertain waters, companies must:
> Develop agile operations that drive flexibility, speed and efficiency
> Maintain investments in key, differentiating capabilities to safeguard their competitive edge
> Pay close attention to regulatory developments including getting involved in advocacy activities
#germany #holland #2024 #predictions #safer #rescheduling #growth