Suddenly there was too much money chasing unfounded business strategies with little appreciation for everyone chasing the same opportunities. The sudden opportunity captured investor dollars and literally saw billions of dollars injected into companies with only an idea and dream of becoming globally dominant, vertically integrated cannabis behemoths that inspired aspirational empire-building without consideration for forecasts, competition or capital allocation.įinally, the Fourth Wave, from 2019 to present, can be recognized as the cannabis bubble bursting, with sudden deflations in investor expectations, market saturation and over-competition. The Third Wave was the money rush and the “vertically integrated” rush of 2016 to 2018. This trend was led by the three C’s: Canada, California and Colorado. The Second Wave was characterized by the early days of medical adoption above all else, with states and counties creating medical programs allowing for small personal grows and designated medical authorizations for cannabis. This early era saw underground groups recognizing the changes in attitude toward cannabis as a medical application and pushing governments to revise their stances on decriminalization and eventually medical legalization. Above all, this phase was about black market participants advocating for the therapeutic uses of cannabis, and legacy participants making necessary steps to develop cannabis for health and wellness applications. The First Wave was the awakening or beginning of decriminalization. Those who fail to innovate will certainly go extinct.
There is a monumental amount of opportunity in the cannabis space, but companies must adapt to the realities of competition and commoditization. This piece will examine the current cycle of cannabis’ road to maturation and what we like to call the “Fifth Wave of Cannabis.” However, it’s important to review what’s come before - what’s worked, what hasn’t and why - since many of the players you might be familiar with are in the throes of new market forces that are carving out winners and losers in ways that industry watchers have yet to see.īottom line: A lot of the strategies to “get on the shelf” are no longer the strategies that keep one there.
The cannabis industry is finally poised to move into a global business epoch that more closely resembles that of other industries - regulated or otherwise - where consumers and decision makers are understood much more clearly and targeted more successfully. As the global cannabis industry moves nearer to commoditization, vertically integrated and niche players alike will give way to specialized operators that can own and optimize their piece of the value chain.
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