The North American cannabis industry continued to demonstrate resilience in the first half of 2024, with recent data from market watchers showing a promising picture for the years ahead.
Read on to learn what moved the US and Canadian cannabis sectors in the first half of 2024.
In the second quarter of the year, there were promising indications suggesting a potential recovery within the cannabis industry, following a period of challenges and difficulties. Many of the major cannabis companies reported strong revenue growth, suggesting that demand for cannabis products remains robust.
Of particular significance is Canada’s high excise tax rate, which imposes C$1 per gram of cannabis or 10 percent of the producer’s selling price, whichever figure is highest.
Excise taxes have significantly burdened the industry, impacting the profitability of the legal cannabis business and forcing operators to drive up prices. This challenging financial environment has made it difficult for Canadian operators to expand, leading to a stifled market with only a handful of major competitors.
Data shared from LeafLink and Cannabis Benchmarks shows wholesale cannabis prices in the US beating expectations for 2024, indicative of a maturing industry even if some markets continue to face pressure to compete.
As the US cannabis market continues to evolve, legislative influence is shaping its trajectory, most notably the US Drug Enforcement Administration’s (DEA) official request to reschedule cannabis in May.
It would also restrict the sale of seeds and flower with higher THC levels, as well as the sale of any synthesized or manufactured cannabinoid. These developments could have far-reaching consequences for the hemp industry, and significant implications for the research and development of cannabis products.
Securities Disclosure: I, Meagen Seatter, hold no direct investment interest in any company mentioned in this article.
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