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Cannabis Industry Leaders Anticipate More Legalization and More Competition in 2019

Huge, risk adverse corporations with deep pockets are ready for when cannabis is legal.

Opinions expressed by Entrepreneur contributors are their own.

With medical or recreational marijuana now available to more than half of the U.S. population and more states’ leaders talking about legalization, 2019 is set to be a very big year for the cannabis industry.

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Growth is expected to continue at a rapid pace, big brands are eyeing the industry’s revenue potential, and acquisitions are happening more frequently than ever. With all of this change, cannabis industry executives are bracing for a big year in 2019.

Cannabis stocks will rebound.

“I think the recent fourth quarter downturn in the cannabis markets is a temporary phenomenon,” says Steve Gormley, CEO of International Cannabrands. “I think the marijuana industry, and in particular Canadian cannabis stocks, is poised for a robust rebound in the first two quarters of 2019. I believe as 2019 progresses, we will see a shift in focus with savvy investors looking for companies that have strong fundamentals.”

CBD, CBG, CBN and CBC will dominate.

"It's not all about CBD,” predicts Peter Vogel, CEO of Leafwire. 2019 will be all about CBG, CBN, and CBC in addition to the huge growth in CBD. Since the Farm Bill has been signed, there will be an increased amount of research conducted on all the other 400 cannabinoids in hemp, like CBN, CBG, CBC, because it will finally be allowed. These specific cannabinoids all have healing qualities that can be used to treat specific conditions and ailments. Once more research is completed, farmers will start to develop clones rich in a specific cannabinoid, prices will drop for these alternative cannabinoids, and we'll start to harness the power of the whole plant."

Big Pharma will evaluate cannabinoids.

“In 2019, I predict an increasing number of major pharmaceutical companies will be evaluating cannabinoid-based drug development programs,” says Sid Taubenfeld, CEO of Jay Pharma. “A growing body of research suggests the use of cannabinoids and the manipulation of the endocannabinoid system could offer new therapeutic options for many serious diseases, including certain cancers. At Jay Pharma, we plan to evaluate CBD and other cannabinoids in combination with existing pharmacologic interventions in hard-to-treat conditions that may include glioblastoma multiforme and triple-negative breast cancer. The launch of clinical trials to evaluate the efficacy of these cannabinoid combination therapies may represent an important step towards improving clinical outcomes in a population of patients with few other effective therapeutic options.”

The cannabis industry will disrupt established industries.

“2019 will be the year that the cannabis industry arrives at the grown ups’ table,” says Mark Grindeland, Co-founder and CEO of Coda Signature. “After operating on the fringes for several years, in 2018, big business began to recognize that cannabis had potential to disrupt established industries from pharma to spirits to consumer packaged goods. In 2019, the disruption will go from potential to reality and the industry will explode. As the momentum grows, I am optimistic that by 2020, we will see new laws that enable our industry to operate on a level playing field with the Canadian marketplace and provide us with the ability to partner with public companies.”

Brand competition kicks into high gear.

"2019 will be the year of the brand,” predicts Carles Jones, founder and CEO of LucidMood. “Up until this point, having a cannabis product was enough to make money. This is just not the case anymore. As competition has intensified, undifferentiated staples like flower and concentrates have been commoditized, resulting in declining margins. In parallel, consumers have become more sophisticated and now demand products that deliver consistent and predictable experiences. It's no longer enough to provide products that simply get you "high" -- dispensaries must provide products that fulfill a differentiated brand promise.”

Related: What I Learned From Visiting 50 California Dispensaries

The U.S. will get closer to descheduling cannabis.

“In 2019, cannabis companies will increasingly focus on building their brands and investing in their technology pursuant to establishing global intellectual property portfolios,” says Tom Zuber, partner and founder of Zuber Lawler & Del Duca. “Furthermore, the federal government in the United States will increasingly embrace the notion of removing cannabis from the Schedule I of Control Substances Act, perhaps pursuant even to potential removal prior to the end of the current presidential administration.”

CBD will take center stage.

Hemp CBD products are going to be the big story for 2019 with the passage of the 2018 Farm Bill that legalizes hemp,” says Charlie Finnie, Chief Strategy Officer of MariMed. “This opens the doors for CBD research, nationwide distribution, and broad-based retail sales. Hemp CBD research, coupled with consumers experiencing CBD’s health benefits firsthand, will dramatically impact attitudes about cannabinoids in general and strengthen the pressure for federal reclassification of cannabis.

Related: How to Start and Market Your CBD Company

Expect a hemp-based CBD products shortage.

“The passing of the Farm Bill in the US will put a spotlight on hemp-based CBD products” says Khurram Malik, CEO of Biome Grow. “However, we expect a global shortage of supply in 2019 to meet much of this demand because it is much harder to harvest and process hemp than other crops. New farms will have a tough time being first-timers. We also expect legislation at the federal level in Congress to be introduced regarding the legalization of medical cannabis.”

There will be too many cannabis licenses.

“I'll put myself on a limb -- I think that in 2019 cannabis will be federally legal,” predicts Carly Bodmer, Director of Sales and Communications of GrowFlow Inc. “This is the year to do it. Canada and several states are seeing the benefits from it. It's too tempting not to, and it’s increasingly popular and a non-partisan issue as children, vets, and communities are benefiting from the plant. I also think we will see an oversaturation of licenses in each state unless the federal program is smarter than what we have seen in each legal state so far."

Related: Inside Mayor de Blasio's Vision for Legal Cannabis in New York City

California’s cannabis business climate will improve.

We anticipate a number of exciting developments for 2019,” says Sam Dorf, Chief Strategy Officer of Verano. “First, the number of cannabis companies listing on public exchanges and consolidating will continue at a breathtaking pace. Second, there will be rapid movement to legalize recreational cannabis due to the pro-cannabis stance of newly elected and key officials in states such as Illinois, New York, and New Jersey. Other states will follow their lead. Key drivers are recognition that cannabis prosecution disproportionately impacts minorities, legalization can reduce opioid addiction and deaths, and the desire for cannabis tax revenue.

“Third, California’s tighter regulations and policing of non-compliant operators creates a better business climate for professional, national operators who have been waiting on the sidelines to tap into the world’s largest cannabis market and operate like they do in other states. Fourth, we will see the beginning of real national brands with state-to-state licensing deals.”

Change remains the norm.

Based on the predictions from these executives, 2019 will be an exciting year in the cannabis industry, but change will still be the norm. It remains to be seen whether the legalization of industrial hemp will negatively affect legal cannabis sales or if it will have a positive effect on the pro-cannabis movement. In addition, it will be interesting to see which brands rise to the top and stay relevant in 2019 and beyond.