- The U.S. federal ban on cannabis may soon come to an end. But the fragmented market makes it difficult to pick a winner
- This may present opportunity for a much larger Canadian company like Canopy or Tilray to become dominant player in US
With cannabis still in the very early stages as a legalized industry is some states, a winner is difficult to predict. Americans are becoming more open to the idea of legalized cannabi by the year. As seen below, the approval has more than doubled in the last 50 years. Now 66% of polled Americans think marijuana should be legal.
With legalization not as farfetched, US companies are lagging to much more established Canadian players. Even as some emerging U.S. brands such as MedMen Enterprises Inc., Lowell Herb Co., and Pax Labs Inc. appear to have early traction, the market is still highly fragmented. That leaves a big hole for Canadian operators like Canopy Growth Corp. and Tilray Inc. to enter if laws change.
This change could be drastic and happen very fast. One proxy for how cannabis companies may grow is the e-cigarette market. In 2013, the top five players held a combined 40 percent of total market share. Today, that number is 97 percent, led by JUUL Labs with over 70 percent. In the cannabis sector, the seven largest publicly traded U.S. cannabis operators captured six percent of market share, leaving space for Canadian companies to enter post-prohibition.
Article By: Fatimah Aminu
Fatimah is an experienced editor at various financial and consumer publishing houses. She obtained a master’s degree in Publishing from NYU, where she earned a bachelor of fine arts degree. She is currently earning a second masters degree at CUNY online in Psychology. Fatimah covers healthcare, cannabis and technology.