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

  • The Far-Reaching Impact of Embedding a Sustainable Workplace Culture for World Earth Day — Today!

    Today’s observance is a great opportunity.

  • Keep Your Browsing Data Private With This VPN

    Surfshark VPN is a lightning-fast security.

  • Can You Still Make Money Dropshipping in 2019?

    The short answer is no. April.

  • Get Proficient With Google Analytics and Improve Your Earning Potential

    This two-day course will have recruiters.

  • How This Croatian Basketball Player Made His NBA Dream Come True

    Ivica Zubac, center for the Los.

  • How to Measure Performance of Your Outsourced Developers

    Focus on the outcome, not the.

  • 5 Reasons Why Kindness Has Become the Key to My Happiness, Both in Business and in Life

    One small act of kindness, even.

  • Why Your Stomach May Hold the Key to Your Mental Performance

    Don’t just blame your apathy or.

  • Learn How to Make Smarter Real Estate Investments

    These expert-led classes guide you through.

  • Strong Retail Sales and Corporate Earnings Results Boost Entrepreneur Index™ and Confidence in the Economy

    The Entrepreneur Index™ posted a modest.

  • Mitch McConnell Is Positioning Himself as the Champion of the U.S. Hemp Industry

    The Senate Majority Leader sees hemp.

  • An Argument for Farming Hemp

    U.S. agriculture has seen better days,.

  • Entrepreneur Index™ Down as Medicare-for-All Idea Rattles Healthcare Stocks

    The healthcare industry, normally a defensive.

  • 10 Time Management Tips That Work

    Are you working on clock time.

  • How This Entrepreneur Is Improving Women’s Health

    This non-profit is testing new strategies.

  • Netflix Surges Before Earnings Report and Pushes Entrepreneur Index Higher™

    Meanwhile, the real estate investment trust.

  • Tax Audits Are on the Rise. Here’s Why You Shouldn’t Freak Out.

    Don’t panic, a letter from the.

  • Green Entrepreneur’s New Podcast Will Make You Smarter About the Cannabis Business

    The weekly show features in-depth interviews.

  • Alibaba’s Billionaire Founder Jack Ma Says Companies Forcing Staff to Work Overtime Are ‘Foolish’

    He was responding to a debate.

  • How This Entrepreneur Used CrossFit to Build a Business

    This Entrepreneur won the 2008 CrossFit.

  • How to Negotiate the Price of a Pricey Premium Domain

    Buying a domain at the asking.

  • This Guide Can Help You Shed Your 9-to-5 and Become Your Own Boss

    Shape your own path as an.

  • Do You Have Trouble Sleeping? If So, This Might Help.

    Lack of sleep can affect your.

  • This Leader Says That 4 Words Changed His Life

    April 13, 2019 1 min read.

  • Boost Your Website’s Visibility With This SEO Course

    April 13, 2019 2 min read.

  • Strong Earnings and Big Oil Deal Push Stock Prices Higher

    Oil producer Hess Corp. helps the.

  • How to Monetize Your Podcast

    Gary Coichy, the Founder and CEO.

  • Why Is There No Green in the Garden State?

    Despite wide support by New Jersey.

  • Tesla Shares Down After Gigafactory Expansion Put on Hold

    Plus, Bed Bath & Beyond plummets.

  • Why Can’t Cops Tell Them Apart?

    Both plants are cannabis, but there.

  • Amazon Employees Call for a Company-Wide Climate Change Plan

    This doesn’t guarantee that Bezos and.

  • Bed Bath & Beyond Once Again Drives Entrepreneur Index™ Higher

    The retailer reports earnings after market.