In a budding industry, every year seems to possess a distinct significance. As someone who has traversed the globe advising on all things cannabis for more than a decade, I can confidently say that no two years have been the same. New patterns and market fluctuations come and go rapidly - a fairly common occurrence as a nascent industry builds its foundation.

At the beginning, fledgling operations run by under-qualified individuals and marijuana dispensaries and CBD stores trying to run operations on a shoestring budget were commonplace. Yet, there were a rich lessons learned in those early years, and the folks that survived did so with a Thomas Edison-like persistence. They learned a million ways not to run a cannabusiness. Over time, those lessons have proved to be invaluable. As have the the keys to running a successful cannabusiness - nevertheless, these took time to distill. While the vast majority of cannabis start-ups have failed to launch, some have risen and gained the recognition of institutional businesses.

Subsequent years brought regulatory enactment - some of it over the top - likely to ensure consumer safety and increase public confidence with respect to a lawful recreational marijuana marketplace. This was followed by tremendous financial investment, peaking with the Canadian markets' public capital infusion. We then saw U.S.-based marijuana operation aggregation by MSOs, followed by a year of tremendous global synergy and international supply chain development.  

Thought it was forecasted pre-pandemic, 2020 brought a combination of back-to-business fundamentals and unprecedented legal and global regulatory progress surrounding all aspects of the cannabis plant. All of this was amplified by the impact of the global pandemic, and the economic difficulties posed by 2020 required unprecedented industry collaboration just to stay afloat. Yet, a recalibrating and return to fundamentals is necessary in an emerging industry. Such trends are not only predictable, but follow a pattern common in any new and disruptive marketplace.  

There are loosely four common phases of an industry’s life cycle —introduction, growth, maturity, and decline. The cannabis industry is not yet mature across the board, but largely stuck in the growth phase. The step between the later stages of the growth phase and the beginning of maturity comes down to one word: consolidation. That is the mantra for 2021.

The New Year kicked off with Jazz Pharmaceuticals acquiring maker of Epidiolex, GW Pharmaceuticals for a whopping $7.2 Billion. We’ve also seen TerraVida Holistic Centers merge with Verano Holdings, HEXO Corp. pick up Zennabis Holdings, Indus Holdings Inc. acquired the Lowell Herb Co., and Curaleaf bank upwards of $300 Million to take advantage of its position and acquire assets.   

There’s also been the rise of the SPAC - or special purpose acquisition company. This is a "blank check company" that essentially acts a shell corporation to be listed on a stock exchange for the purpose of acquiring a private company. This offers a pathway for company to go public without going through the traditional initial public offering process.

Aggregation is at an all-time high in the cannabis industry and it’s only just begun. This is, of course, heightened by the promise and hope of American cannabis policy reform, Mexico’s legalization of an adult-use marketplace, and the United Nations rescheduling of cannabis. All of the pieces are in place and a sentiment is growing that we are the cusp of a fully realized global cannabis industry.

The timing is right given the likelihood of post-COVID economic, and that could very well be the catalyst for garnering mainstream support for cannabis commercialization.

Money is beginning to flow into the industry again and consolidation is happening at all levels - from small marijuana dispensaries to firms joining isolated supply chain components under one entity in the cannabinoid space. One must understand this process or suffer the repercussions of being out of touch and left behind. 

This also applies to ancillary companies – technology developers and providers, equipment and material suppliers, and, even, professional service providers. One thing is for certain - get on the train or miss these timely opportunities.  

It’s time to shift our perspective away from isolationism and find the right people to stand with shoulder-to-shoulder. Check your ego at the door and examine your business objectives - the only way to get from point A to point Z today is through partnership and collaboration.

In addition, it is a critical time to diversify product offerings. For example, if you’re a CBD company, identify other companies that offer distinct product lines that either complement your offerings, help you build out your portfolio, or create synergies with your operations. The best way to help yourself is to explore pathways for collaboration. There is a road between the dawn and dark of night, but to find it you just gotta poke around.