2022 is set to be another key milestone for the cannabis industry, according to the latest New Frontier Data report.
Exploring 22 themes to watch in 2022, New Frontier Data’s report assesses how each issue will impact the cannabis market.
The report highlights that new adult-use markets are poised to officially launch sales, and the COVID-19 pandemic is causing increased consumer demand. However, it highlights that there are now increased risks of an acute market correction that could disrupt capital flow.
CEO of New Frontier Data, Gary Allen, stated: “The industry’s fundamentals remain strong, and we firmly believe that 2022 will be another breakthrough year for the cannabis industry.
“Understanding the nuances of legalisation, global expansion and consumer demand is critical for stakeholders seeking to turn risks into advantages and capture growth.”
Europe
2021 was an unprecedented year for cannabis in Europe. “…the seeds of full adult-use cannabis have been planted in Europe in Germany, Luxembourg, and Malta,” states the report.
Earlier in October, Switzerland announced plans to legalise recreational and medical cannabis, and Luxembourg announced it would allow home cultivation. Additionally, in an historic first for Europe, Malta voted in a bill legalising the adult use of cannabis in early December.
Read more: New Frontier Data report explores cannabis growth and market trends
In November, Germany’s new “traffic light” government coalition in also made its plans to legalise recreational cannabis official with the publication of an agreement on the subject. Germany is already the largest market in Europe for medical cannabis, and the report predicts legal medical cannabis sales in Germany to reach USD$590.7m by 2025 (£437.16m)
The report highlights these progressive legislation changes will drive further legalisation across Europe.
“…as Europe’s largest and most influential economy, Germany will play a particularly important role in marshalling the infrastructure and technical expertise for a regulated cannabis economy on the continent,” states the report. “These capabilities will then diffuse through Europe’s highly porous borders, lowering the costs and speed to market for other countries that follow suit.”
The German announcement will change the opportunities available in Europe for American recreation companies, which until now, have been largely uninterested in the European market.
The report highlights: “With a population of over 80 million, Germany will be a larger consumer market than California, New York, New Jersey, and Washington combined.
“With the EU having some of the world’s most favourable conditions for international expansion, Germany will be a strategic launchpad for international expansion as other countries follow suit in cannabis reform.”
Hemp in 2022
Global warming and the sing-use plastic problem is driving businesses and consumers to seek out alternative products to those that damage the environment.
Hemp has been hailed as a wonder material that could provide part of the solution in providing high carbon sequestration and an alternative to harmful plastic materials.
Read more: New Frontier Data now largest centralised source of cannabis patient data
In America, the report highlights that 2022 will be the year of grain and hurd hemp production as “growing a single-use crop for one of these purposes may not yield a return on investment that justifies allocating acreage to hemp that could be allocated to a staple agricultural commodity.”
Hemp grain will also be approved in 2022 as poultry feed in America, and in North America, as manufacturing capacity increases and the cost of finished products falls, hemp based materials and bioplastics are set to see a dramatic increase in demand.
Despite this, New Frontier Data states that “the lack of guidance from the FDA on CBD will continue to leave the hemp sector without a regulatory framework, significantly curtailing investment and commercialisation.”
Uncertainty for the industry
Developments in the industry across the globe are looking promising for 2022, however, the report highlights that with no sign of the current COVID-19 pandemic ending, continued global supply chain issues and rising inflation, the slow down of economic growth “will have cascading implications for the cannabis industry.”
With the lack of federal reform impacting the American market – investors may be pushed into safer areas.
However, New Frontier highlights the industry’s resilience throughout the pandemic, noting that “this resilience will prove to be an asset, even in the face of broader economic headwinds, and will likely reward risk-tolerant investors who are less focused on near-term performance but rather medium and long-term returns.”
To find out more about the cannabis industry in 2022 and two read all 22 predictions for the year, please visit newfrontierdata.com.
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