First, allow me to set the stage with some facts:
- Currently the market value of the cannabis industry is approximately $60B and climbing.
- About 6 out of 10 Americans say the use of marijuana should be legalized, reflecting a steady increase over the past decade, according to a new Pew Research Center survey.
- 33 states and Washington, D.C. currently have passed laws broadly legalizing marijuana in some form. D.C. and 10 states—Alaska, California, Colorado, Maine, Massachusetts, Michigan, Nevada, Oregon, Vermont and Washington—have adopted the most expansive laws legalizing marijuana for recreational use.
- As of October 17, 2018, Canada has completely legalized marijuana for recreational use.
The times are certainly changing.
So, off I went to the Marijuana Business Conference (MJBizCon), with more than the usual intellectual curiosity. I couldn't have fathomed that at any point in my career I'd be at a marijuana industry conference. I would joke with friends and family, "Guess where I'm going?" And in return they'd make an amusing Cheech and Chong or Snoop Dog reference. Good fun.
For all intents and purposes, it felt like any other conference. One of the largest I’ve ever attended … with 158 speakers, 27,600 cannabis professionals, 1000+ exhibitors all in the span of three full days. My reaction to this scene is that the “genie is out of the bottle” and I don't see anyone putting it back in. This is big business, and in my opinion, it's here to stay.
Now, when I say big business, that comes with some hyperbole. It's not big business yet. It's a gold rush, or as it was put to me, a green rush. It's really NEW business. In North America alone, spending on legal cannabis is expected to hit $57 billion by 2027, which means we’ll likely see more conferences like MJBizCon in coming years. In fact, if you think about it, this is the first new major consumer industry in America since mobile phones. It seems that everyone was trying to figure out how they could fit into this new world. The exhibitor floor was filled with all kinds of business, from fertilizers, to Point of Sale systems and everything in between.
Like my co-attendees, I also wondered how my business—supply chain security—fits in here. Takeaway? Product tracking! I met up with other authentication and track-and-trace vendors around the show and discovered that the industry does have some pretty clear requirements around traceability.
For cannabis, traceability typically means:
- Where did the seeds come from?
- What strain are they?
- When were they planted and harvested?
- How much (weight) buds, leaf and waste were produced?
- What were the drying/curing stage process details (re-weighing)?
- What is the final product? (bags, joints, oils, edibles, etc.)
- Chain of custody on sales and transfers from producer to retail
- Taxable retail purchase volumes, including prices, sub-type, strains or other specific reports
After several years of trying to control unlawful production and dispensing of various forms of cannabis—relying on a manual process with cumbersome "hard copy" record keeping—municipalities recognized that such methods were neither timely nor accurate ways to maintain compliance with applicable laws. In the U.S., each state has mandated a specific system to track product, and seemingly it works much like the pharma industry by using serial numbers.
The industry is moving and changing rapidly. It’s still full of unknowns and "greenfield" (pun intended) opportunities. But we know from firsthand experience in the pharma industry that it’s only a matter of time before the federal government steps in with their own set of regulations.
As businesses work to find their place in this fast-emerging industry and begin to develop repeatable business models out of thin air, they need to be ready with a plan to meet the future regulations.