6 Competitive Forces Driving Expansion of Cannabis Extraction

The market share for cannabis flower is destined to keep shrinking.


5 min read

Opinions expressed by Green Entrepreneur contributors are their own.


The global market for the overall cannabis sector is poised for exponential growth. What was, as of 2016, a $9 billion industry is expected to achieve a compound annual growth rate of 34.6 percent, reaching $146 billion by 2025. Within the industry, the most optimistic projections center on cannabis-based extract products.

There’s a long way to go until 2030 arrives, and we are talking about an industry still in its infancy. But for those who have recently entered the cannabis marketplace or are looking to jump in, it’s helpful to have a clear and specific understanding of the factors driving the steadily expanding competitive profile of cannabis and hemp extract — and why market share for cannabis flower is destined to keep shrinking. Let’s take a look at six contributing factors:

1: Cannabis extract is safer than the cannabis flower.

One reason the market has gravitated to extracts over flower is safety — and particularly safety concerns associated with pesticide contamination. Just last year, for example, multiple news reports cited the presence of dangerous contaminants in a wide range of cannabis products being sold in California.

The extraction process associated with conversion to cannabis oil creates a product that’s simply safer than cannabis flower. That’s because oil-related extraction methods involve levels of high pressure and high temperature that kill off any lingering bacteria. Reflecting growing acceptance of the safety payoffs associated with extraction, the state of Florida recently began placing new restrictions on its cannabis industry to ensure that producers are generating products whose processing adheres to strong public health standards.

Vaping cannabis extract is also a safer alternative to smoking flower because there’s no risk of inhaling carcinogenic smoke. Some industry analysts also state that oil offers greater protection against liability than flower.

Related: Vaping Causes Stronger High Than Smoking Marijuana, New Study Finds

2. Cannabis extract offers greater consistency.

The cannabis extraction market is also growing rapidly because it offers end-users a more consistent and reliable product than flower.

Cannabis oil extraction uses automated instrumentation that allows for superior processing and consistent levels of dosing. Technologies deployed for oil extraction enable the manufacturer to fine-tune the final product’s ultimate composition. This is particularly important when it comes to the final mix of such components as cannabinoids and terpenes. By contrast, cannabis flower processed by humans doesn’t meet consistent quality standards. Absent the automated process, each new batch of flower-based product can vary in consistency.

Accurate dosing is also complicated by the way the flower is ingested — as well as by the absence of a homogenized form of the product. Each flower and each of its component parts are different. This prevents the consistent regulation of the amount of THC (the plant’s intoxicating ingredient) in the final product.

Related: 5 Things You Need to Know About Edibles

3. Cannabis extract offers a wide and growing range of medical benefits.

Compared with cannabis flower, oil extract opens the door to a far greater number of pharmaceutical uses and specialized forms of medical treatments. The pharmaceutical industry — which devoted an estimated $51.2 billion to research and development in 2014 — is keenly aware of these opportunity and is investing heavily to capitalize on them. From our work within the industry, we have witnessed deep engagement in research that would isolate the ways particular cannabinoids can be incorporated into medications.

Research has indicated, for example, that oil-derived cannabigerol (CBG) has anti-inflammatory effects. In addition, a 2015 analysis by the National Institutes of Health “strongly supports” CBD as a treatment for a range of anxiety-related disorders.

4. Cannabis extract presents end-users with an array of choices.

Another factor driving the growing dominance of cannabis oil is the wide range of choices it offers. The ultimate oil product can be modified in respect to taste, texture and color. Formulators, for example, can create oil that is smooth and not harsh. The oil can also be made to taste good.

Choice is further expanded by newly introduced vaping pens that feature different batteries offering varying voltage systems. In addition, Bluetooth connections are now available that allow users to track dosage on their phones.

5. Cannabis extract use is socially acceptable.

Considerations of social acceptance also contribute to the expected market dominance cannabis oils. People feel less social stigma when using a vape pen as opposed to smoking the cannabis flower through a cigarette or in a pipe. In addition, vape pens are less conspicuous. They’re more convenient than the flower alternative and allow users to dose or treat issues with more ease and privacy.

Cannabis and hemp oil is also useful in other formats beyond vaping, including tinctures, capsules, food (such as baked goods and gummies), beverages and pet drops.

Related: This Is How to Finance Cannabis Oil Extraction Equipment and Keep All Your Equity

6: Cannabis extract is appearing in growing numbers of mainstream products.

Cannabis and/or hemp extract — most commonly CBD — is popping up everywhere. It is appearing in steadily growing numbers of cosmetic products, medications and foods. Retailers, drug makers and food purveyors — encouraged by their marketing teams — are aggressively expanding the product’s reach.

With an eye on cannabis and hemp, smart investors and entrepreneurs are seizing new opportunities for business success. They’re getting acclimated to some of the competitive basics that underpin the industry, as illustrated by the six factors listed above. More states are inviting the industry in. The momentum is real.

With the right advisors, the right technology, the right financing model and the right business plan, these investors and entrepreneurs will set themselves on the path to success in 2019 and beyond.

Source link

more recommended stories

  • How to Boost Sales With Seasonal Products

    Just because the leaves turn doesn’t.

  • A Dispensary That Caters To The Canna-Curious

    The information contained on this website.

  • Why Execution Is More Important Than Strategy

    Good ideas are only half the.

  • How Mobility Is Revolutionizing Transportation and Business

    August 22, 2019 2 min read.

  • A DNA Testing Kit That Tackles Your Health From The Inside Out

    DNA-based probiotics might help you feel.

  • Why Diversity Is the Secret to This Talent Agency’s Influencer-Based Approach

    This founder talks about catapulting into.

  • How to Handle Difficult People (and Still Achieve Your Business Goals)

    A founder’s guide to effectively utilizing.

  • 6 Tips From a Clean Beauty Entrepreneur

    Sarah Biggers went from a newbie.

  • Explaining the Benefits of Cannabis to Your Grandma

    Future studies are still needed, but.

  • 9 Ways to Handle Job-Related Stress From Dawn to Dusk

    It’s all in a day’s work..

  • Want to Become a Better Communicator? Learn to Listen.

    Cross-check your own habits with these.

  • How a Terrible Motorcycle Accident Led to a Business Built on Relieving Pain

    Dr. Jason Wersland describes his invention,.

  • Upgrade Your Facebook Marketing Efforts With This Course

    Get ahead of the competition with.

  • Success Lies in the Subtleties, and Every Second Counts

    John K. Coyle, discusses why a.

  • Entrepreneurship Often Involves Uncertainty. Here’s How to Deal With It Productively.

    The future may be unknowable, but.

  • How to Use Your Calendar Like GPS

    This author breaks down how he.

  • Here’s How to Reduce the Cost of Cannabis for Consumers

    Consumers could be saving money while.

  • 6 AI Tools Entrepreneurs Can Use on a Budget

    Countless businesses are already taking advantage.

  • 4 Things Your Team Manifesto Must Spotlight

    Done well, and this mother of.

  • ‘Why Can’t I Focus?’ Here’s What the Science Says.

    August 16, 2019 1 min read.

  • Taking on a Much Bigger Rival in a Hyper-Competitive Segment? Try a Move From This Playbook.

    Mazda’s North American president explains how.

  • How to Make PR Work For You

    Here are the decisive factors you.

  • Why Your Business Growth Depends on IT Infrastructure

    Success only evolves if company tech.

  • How to Turn Your Biggest Fear Into Your (Career) Superpower

    Negative beliefs can derail success, but.

  • Use This Secret Military Trick to Tell if Someone Is Lying

    January 30, 2019 5 min read.

  • This High-Performance Psychologist Explains How to Push the Boundaries of Human Potential

    Dr. Michael Gervais’ client roster includes.

  • The Rise of Impostor Entrepreneurs

    It’s not only easier to steal.

  • What This Defense Consultant Learned From His Felony Conviction

    Justin Paperny served 18 months in.

  • How to Get a Book Contract From a Legitimate Publisher

    It could be the key to.

  • How Self-Driving Cars Could Shape Our Future

    Once challenges are surmounted, the world.

  • This is Weed You Can Wear

    Double Barrel Chief Brand Officer Ann.

  • If You Love Doing Something, Chances Are That Other People Do, Too. Here’s How to Start an Experience-Based Business.

    Catch the trend of entrepreneurs starting.