As the industry waves goodbye to 2023 and the “tough times” that characterized it for so many cannabis companies, we are starting to receive predictions about what to expect in 2024, only this time few people are expressing any confidence that external catalysts (descheduling, SAFER Banking, etc.) are coming to the rescue. If there is optimism – and there is – it is about individual markets, internal company achievements, and the overall growth of the industry. Beyond that and the usual expressions of hope that Congress will finally get its act together, no one is making any bold prognostications.

David Goubert: President & CEO, AYR Wellness

“MSOs will be focusing on the financial health of their companies, prioritizing cash flow generation and fostering leaner, more efficient operations.

If rescheduling and 280E relief occurs as anticipated, annual tax expenses would decrease, allowing companies to pay down debt and reduce annual interest expense. This coupled with the prospect of Adult Use in Ohio, Pennsylvania and Florida has the potential to result in significant de-leveraging by 2025.

1. For additional perspective, AYR has 88 retail stores across our footprint today. Of those 88 stores, only 15 of them are adult-use stores. With legislative catalysts in Florida, Ohio, Pennsylvania, we estimate our adult-use retail footprint to increase nearly 6x by 2025.
2. You also may see certain multi-state operators become a bit more aggressive in their expansion once again… but not until the end of 2024 or beginning of 2025. As these leaner, more efficient companies will be in a better position to expand once again.

Companies with larger brand portfolios will start slimming down and condensing their brands to allow for a more meaningful resonance with consumers in the markets where they are sold.”

Ben Kovler: Founder, CEO and Chairman, Green Thumb Industries

“As I reflect on Green Thumb’s performance over the last year, I am optimistic about the opportunities that lie ahead in 2024. Our long-term strategy of creating brands and products that resonate with the consumer, remaining disciplined with our capital allocation and driving growth that generates cash flow positions us to continue investing in the business in 2024.

The recent Gallup poll revealing a record 70% of Americans support cannabis legalization shows more than ever that Americans are choosing cannabis for well-being. In 2024, Green Thumb will continue to connect people to the cannabis experience in innovative ways. We are excited to build on the momentum from the recent adult-use sales launch in Maryland as we prepare for transitions in Ohio, Minnesota and hopefully other states that may have adult-use on the ballot in 2024.

Green Thumb is honored to play a role in ending Prohibition 2.0 in America as we continue our mission of promoting well-being through the power of cannabis.”

Alleh Lindquist: CEO, FloraWorks Holdings Inc.

“In 2024, cannabinoid therapeutics will become the leading emerging market opportunity in the cannabis industry. Since FloraWorks’ inception in CBN manufacturing in 2020, the market has surged to well over $277 million in recreational sales alone. CBN-infused products dominate the top-selling SKUs for five out of the top six national edible brands, driving the global market to an estimated $1 billion. This year, our own landmark sleep study clinically-validated the use of CBN for sleep improvement – looking to 2024, I expect to see the market becoming more invested in CBN as a potential alternative to other natural sleep aids and existing pharmaceutical options. I also expect to see a continued upward trend in cannabinoid research as our industry seeks to discover the vast therapeutic potential of rare and novel cannabinoids, paving the way for innovation and growth. We are on the precipice of being able to offer new hope for a variety of unmet medical needs, and we at FloraWorks look forward to continuing to unlock the diverse potential of this ingredient.”

Morgan Paxhia: Co-Founder, Poseidon Investment Management

“If I had a crystal ball, this is what I believe it will tell us about the next twelve months in the legalized cannabis industry. The forthcoming year will be the most exciting ever in the industry. I foresee the federal government reclassifying cannabis rescheduled as a Schedule III controlled substance on April 20, 2024. Immediately afterward, Democratic leaders like Senator Chuck Schumer and Senator Cory Booker will hold press conferences and try to take a victory lap.

In response, certain members of Congress will attempt to stifle this reclassification and force an egregiously high 14% excise tax, which some will try to prop up as a compromise. President Biden will miss the chance to capitalize on this historic shift in federal policy, allowing Donald Trump and the Republican Party to swoop in and boost their perception among younger voters.

Additionally, I believe hemp-derived Delta-9 THC products and other naturally occurring intoxicating hemp-derived cannabinoids will be forced into regulated channels, closing the Farm Bill loophole. Unfortunately, we will see no SAFER Banking Act progress. Instead, a Garland Memo-like protection will be introduced alongside Schedule III in response to the Boise Schiller Flexnor lawsuit against Attorney General Merrick Garland on behalf of several cannabis companies, creating enthusiasm throughout the industry.

Rescheduling alone or rescheduling/memo combo will result in a new wave of liquidity, a surge in M&A activities, equity issuance and refinanced debts that will bail out many who may not survive otherwise. We will also see new companies listed on CBOE in Canada. By the time the ball drops and welcomes in a New Year, we will look back at what has been a wild ride in 2024.”

Lewis Koski: Chief Strategy Officer, Metrc

Europe

“Germany will become the largest market for adult cannabis with the passage of its Decriminalization bill. The country will also take material steps towards providing commercialized cannabis to adult cannabis consumers through nonprofit social clubs earlier in the year, and regional model projects later in the year.

Czechia is likely to follow suit with a bill for legalization early next year. It is not entirely clear how comprehensive the bill will be at this point, but some industry optimists are pointing to a more comprehensive approach with commercialization included. The most likely path forward will be for the Czech government to model its legislation after Germany.

The cannabis conversation is likely to slow down considerably in Portugal. There was a lot of momentum of a legalization bill getting introduced later this year.  Those hopes of legalization have been tempered significantly with the resignation of Portugal’s Prime Minister.  His resignation triggered elections for a new government, which will be held in March 2024. No one is expecting any movement on cannabis legalization until later in the Spring or Summer of 2024 at the earliest.”

United States

“Rescheduling, 280E and banking will likely still be the primary areas of focus in DC. 2024 is a presidential year, and those years have been pretty good for the expansion of cannabis legalization within the states. To the extent there are still states where the electorate can make the call on legalization, we might see a few more states put legalization on the ballot. Any movement to expand or legitimize legalization could yield positive results economically for an industry that has felt the impacts of an uncertain economy.”

Bill Rinehart: CEO, BOLD Carts

“In the upcoming year, we at BOLD Carts expect to maintain our reputation as key innovators in the cannabis and technology space. In 2024, we see a shift away from cartridges to all-in-one devices, meeting consumer need for discrete consumption alternatives. As more consumers move from live resin to Rosin and thicker oils, there’s a growing need for reliable hardware. BOLD, known for its exceptional customer services and patented technology is positioned to meet these demands.”

“Beyond just products, 2024 is all about scaling. As markets begin to open and mature, we see this as a major opportunity for expansion. For example, with vape pens emerging as the second highest selling category in Missouri, a state that recently legalized adult-use sales, it highlights the growing demand for these products.”

Socrates Rosenfeld: CEO & Co-Founder, Jane Technologies

“As we approach 2024, the US cannabis industry finds itself at an exciting point in time. With the government’s recent actions on issues like SAFER and rescheduling, the end of cannabis prohibition has never felt closer to becoming a reality. With future consumer growth expected to be exponential and large mainstream brands anticipated to enter the space, current Industry operators must continue to invest in scalable solutions to remain competitive. Powerful digital infrastructure, deep data analysis, and trusted customer relationships not only will be important factors in determining the future winners of the US market – but also will shape the future of the global industry for generations to come.”

Bryan Gerber: Founder & CEO, HARA Supply

“In preparation for 2024, cannabis operators are seeking to further cut costs and prioritize efficiency across the supply chain. We expect to see a cost-conscious evolution in the sector, marking a strategic response to market demands for affordability and sustainability, where practicality meets innovation.

With this in mind, manufacturers will need to meet these demands while differentiating themselves from competitors to position themselves as preferred industry vendors. For example, Hara Supply is able to cut costs on cones, combustibles and related packaging for the industry’s largest retailers, CPG brands and MSOs by leveraging our domestic and global facilities and strong partnerships, all while speeding up delivery times and improving product quality and customization to offer unparalleled customer experience.”

Paul Weaver: Head of Cannabis, Boston Beer Co.

“As the newest generation of drinkers reevaluate their relationship with alcohol, the popularity of cannabis beverages is an enticing alternative. The success of TeaPot, our line of THC-infused iced teas, highlights this emerging demand and we can’t wait to see how the category grows.  Whether it’s a marijuana-derived beverage sold in a dispensary or a hemp-derived beverage sold in a liquor store, cannabis drinks are challenging the status quo, have a growing fanbase, and represent the future of adult consumption.”

Ed Schmults: CEO, StateHouse Holdings

“CA continues to be a challenging environment to operate within. We are seeing some submarkets begin the licensing process to allow Cannabis operators a path to licensure. This should provide some nominal level of market growth for the state over the coming year. The more mature markets, however, are continuing to deal with added pressures to issue additional licenses within their jurisdictions, effectively splitting market share between a larger number of operators and bringing revenues down to potentially unsustainable levels. The mature markets are expected to continue to become more saturated for the foreseeable future.

Taxation is still a disaster in CA. A material number of operators are flat out not paying taxes while others are taking advantage of theoretical tax loopholes as the CDTFA works to close them. With only a small segment of the market participants current on taxes, it begs the question of when the state will act. Beginning Jan 1, Employers in CA will be restricted from taking adverse action against employees or job applicants based on off duty Cannabis use. This new law is much needed protection for Cannabis consumers, and we hope that more states begin to follow suit.

The HHS recommendation to reschedule Cannabis to Schedule 3 was some welcome news, although about a decade late unfortunately. We are hopeful that the federal government takes the steps necessary in the short term to see this change through, but we are realistic in our expectations on timing for implementation. We see an implementation of 12-18 months as being a bit more reasonable than the 6-month timeline mentioned by some. I’d expect to see some value accrue to top-tier CA operators who are publicly listed as an easy bet for retail investors who are keen on the industry. CA is, and has been, the biggest brand in Cannabis and this regulatory change could be the tipping point for investors who are sitting on the sidelines. Schedule 3 will be a big step in the right direction, though outright de-scheduling is a far cleaner path for the Cannabis industry.”

Deborah Saneman: CEO, Würk

“In 2024, we hope to see a continuation of the scaling, expansion, and operational efficiency our industry has witnessed this past year. The evolution of new markets, legalization of recreational sales in various states, and adjustments to standing regulations have caused impressive growth industry-wide. Already servicing the majority of key businesses in the industry, Wurk has strategically streamlined business operations to prepare for continued success and looks to broaden our offerings for our clients. We couldn’t be more excited to see what 2024 offers.”