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What's in the Future for Cannabis and Psychedelics? Industry Leaders Weigh In.

Last year was challenging, but 2021could be transformative.

Opinions expressed by Entrepreneur contributors are their own.

Last year was challenging, so you may be wondering: What's in store for 2021?

Adrienne Bresnahan | Getty Images

Well, this year, investors will slowly come out of their coma, and financing will gradually pick up. Companies with bad balance sheets and lack of profitability may see hostile takeovers and M&A activity in 2021. After a winter of death and disease, most in-person events and gatherings will not occur until 2022, although MJBizCon in Vegas has a fighting chance in December of 2021. Expect more pivots by events-based businesses to virtual, or a hybrid model may emerge. I expect 2021 to be a grind in Q1 and Q2, similar to 2020, but if the vaccine gets distributed well and people comply, Q3 to Q4 could see compelling growth, particularly in places like Nevada.

Related: 4 Bold Predictions for the Hemp Industry in 2021

On a positive note, more ownership by people of color and social equity licensees will occur in 2021, and I see consumers embracing these companies more than ever before. Even better, corporate cannabis will start to incubate these businesses more and understand the greater value in being a part of the solution than piling onto the problem. This will also be a banner year for sustainability in cannabis. As the community continues to innovate in this area, expect to see more biodegradable packaging and materials across the board. If financing can follow, big steps can be taken in this area in the new year.

I asked a few of my colleagues in the cannabis and psychedelic sectors to share their forecasts, too: Success Centers Equity for Industry Program Manager Angela White, DoubleBlind Co-founder Shelby Hartman, Backbone Chief of Operations Peter Huson, PhD, Vicente Sederberg Partner & Composite Co-founder Jeffrey Welsh, Space Coyote President Scott Sundvor, and El Planteo CEO / Benzinga Cannabis Managing Director Javier Hasse.

Angela White: The Amendment, Section 5922 (a) and Section 5923(e) of the MORE Act, would destroy our Equity Programs by saying that people with cannabis convictions or participation in court proceedings could be denied. This is very disappointing, and instead of celebrating, there is now a call to pull the bill. I predict we'll be shining a light on the importance of equity in 2021, due to the oversight we see now to solidify the future of Equity Programs nationwide.

Shelby Hartman: So much has happened in the psychedelics industry in 2020, and things only seem to be accelerating in the new year. Following in the footsteps of Denver, Oakland, Santa Cruz, Ann Arbor, and Washington, D.C., we will see activists in jurisdictions around the country aim to decriminalize psychedelics through their city councils or prep initiatives for upcoming elections in 2021. We also anticipate more states will begin drafting measures, inspired by Oregon, to legalize medical psilocybin. The interest from investors in the psychedelic space isn't going to slow down either, with psychedelic drug development companies planning to go public next year and raising money to get psychedelic compounds through the FDA approval process.

Peter Huson, Ph.D.: No U.S. federal legalization in 2021, but the stage is set. The rest of the world sets up the foundations of global trade. Two U.S. Frontiers:

  1. THC: The hard-learned lessons of early west coast U.S. legal cannabis helps the rest of the country accelerate to maturity. Legacy operators who see the opportunity immediately find their place, people who fight it don't, or they jump to hemp/off the grid continues. Legacy software providers know they can't compete and continue going after developing markets, knowing CannaTech 2.0 & 3.0 are on their heels. Franwell assumes the federal contact is theirs as they are first in line, but it has come to their attention that there is competition and better software, but they don't have DMV lobbying history to match. Big Pharma & Tobacco are closely monitoring and positioning.
  2. Cannabis minus THC (hemp or "minors" as they call us): Prices continue to fluctuate. The industry realizes that all those "failed" Canadian L.P.s that you don't hear about in the U.S. news anymore are standing up global networks and operations in Mexico/Central/South America, Europe, Africa, and Asia. This frontier already knows that regardless of METRC, the stakeholders are now the FDA, USDA, DEA, and more. GxP is fundamental to passing a U.N. audit, but Big Pharma & Tobacco already know that and are already here.

Jeffrey Welsh: I believe that the license application process and communication between different regulatory agencies will be streamlined immensely following the consolidation of the BCC, MCSB, and CDPH in July of 2021. I believe we will continue to see an increase in sales surrounding the luxury product category on the product side. With people spending more time at home, I think they're ditching bargain cannabis products for a more luxurious experience.

Scott Sundvor: 2021 is a year of maturation and scale for the California cannabis industry. After several years of recreational cannabis being a 'new' industry, 2021 will show that's no longer the case. Dispensaries are becoming chains, contract manufacturers and cultivators are getting to scale, and the brands that will win are the ones that can adapt and operate like traditional CPG companies while maintaining respect for the heritage cannabis market and O.G. consumers.

Javier Hasse: 2020 was a solid year for cannabis and psychedelics. We saw big moves out of the U.N., several U.S. states, and multiple countries worldwide related to marijuana's legality. Meanwhile, we witnessed the advent of psychedelic medicine in the mainstream, with several companies going public with substantial valuations. I expect to see a continuation of these trends, as the world cozies up to non-traditional and plant medicines. It is very likely many more psychedelics-focused companies continue to IPO in U.S. and Canadian exchanges as clinical trials advance alongside the science behind these compounds. It is also quite probable that more cannabis companies will get into the psychedelics space, which started to take off in 2020.

On the cannabis front, expansion in access around the globe seems imminent. After a strong correction in stock valuations, a considerable number of cannabis companies should deliver strong performances in the market. It remains to be seen if Canadian companies will maintain their dominance or if U.S. and European businesses will overshadow them. We can also expect further specialization in the space, with companies trying to dominate one of the four main branches of the cannabis industry: adult-use, over-the-counter CBD products, hemp, and pharmaceutical products. Instead of reaching every consumer segment, businesses will likely attempt to lead in a single portion of the market.

Finally, a cannabis-friendly Biden-Harris administration could help restore some of the faith investors lost in the cannabis industry in late 2019, allowing for a more significant influx of capital into the sector, which saw a decline of roughly 65% in 2020 versus 2019. In Latin America, we'll likely see the Colombian market finally take off, Uruguay will expand access and possibly open sales to tourists, and Argentina will start developing a real industry.