Cannabis Week Revealed Some Major Market Trends

By John Kagia, EVP of Industry Analytics of New Frontier Data

What We Have Learned: Despite Las Vegas’ legendary slogan, November 2017’s Marijuana Business Conference and Expo (MJBizCon) left plenty of folks talking about 2017 as a watershed for when the cannabis industry first matured.

Along with about 18,000 attendees and some 700 exhibitors, industry professionals, Wall Street investors, and international speculators milled about the booths, restaurants and bars to get down to business, investing much more effort toward leveraging strategic partnerships than jerking around some one-armed bandits. While New Frontier Data had plenty to share throughout the week, we also noted some worthwhile takeaways.

The Execution Delta: This MJBizCon has seen a stark difference between companies that have, or not, successfully executed their business strategies since last year. The delta between companies founded around the same time, but which now exist in manifestly different stages of business development, is pronounced. While luck has played some role, sticking to a clear and well-defined core plan — and tenaciously pursuing it — has been a key differentiator.

Buzz about Constellation Brands: Constellation Brands’ investment into Canopy Growth Corp. represents a very public entrance of a Big Alcohol player into the cannabis industry. Equating to a 10% ($195 million U.S.) investment stake in Canada’s largest LP, the move has industry stakeholders excited about large, well-capitalized companies taking the cannabis space seriously.

Data ≠ Insight: Since 2014, the cannabis sector has turned from a very data-averse environment (with operators anxious whether their data could be used against them), to one where data is now collected at virtually every point of the supply chain. Still, while companies are awash in data from their POS, seed-to-sale, ERP and CRM solutions (among others), translating that data into meaningful, actionable insights lags well behind. Conversely, New Frontier Data’s ability to translate industry data into monetized intelligence is ever more resonant — and increasingly valuable – throughout the space.

The California Conundrum: The state’s pending adult use market has every stakeholder looking to discern how the regulations might play out both in 2018 and throughout its evolution. Among unknowns about how a state with the world’s sixth-largest GDP will impact the market and federal policy, we know that operators will not have it easy, and the regulatory environment will determine the overall industry’s growth and viability going forward.

Out: Tie-Dyes and Eye Candy; In: Deep Pockets and Steak with Sizzle: Another difference at MJBizCon between last year and now is appearance and presentation: Today’s players are adopting the professional demeanor and attitudes seen among other established industries. While the immaturity of some brands remains unambiguous, the prevalence of suits amid discussion of capital deployments (in hundreds of millions) underscore how cannabis is becoming mainstream. Industry entrants bring a great depth of expertise and experience from other sectors; they are not only transforming the business of cannabis, they are transforming its face, and erasing some of the stigma long associated with cannabis.

John Kagia

John Kagia is the Executive Vice President, Industry Analytics for New Frontier Data. He applies his keen understanding of market research, business strategy and industry analysis to help high performing organizations achieve their strategic objectives. Leveraging his years of experience managing research studies for industry-leading clients including Accenture, Microsoft, The George Washington University, and the U.S. Department of State, Kagia brings a keen understanding of how market insights enable organizations to plan, grow, compete, and measure performance more effectively.

Kagia is particularly interested in helping to identify and build sustainable competitive positions. His passion about issues such as disruptive innovation and new market opportunities, has brought him to focus on identifying strategic business opportunities in the fast-evolving marijuana industry.

He received his MSc. in Marketing with a Market Research focus from Johns Hopkins University’s Carey Business School. He concurrently studied Japanese at the university’s School for Advanced International Studies (SAIS). He received an MA in Management from the University of Durham in the United Kingdom, and his B.A., Joint Honors, in Japanese and Management from the University of Leeds also in the UK.

Kagia is Past President of the Mid-Atlantic chapter of the Market Research Association (MRA), and has earned Professional Researcher Certification (PRC) status. He is also an active member of the American Marketing Association (AMA).