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2022 Predictions for the Cannabis Industry

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Jessica Billingsley, Akerna CEO

At the end of each year, I predict what the new year will bring – for cannabis, culture, and business in general. For the last two years, I was 80% correct on my predictions. This year, I am happy to share that I was either 90% or 100% accurate with my predictions, depending on if the FDA regulates CBD by the end of the year. Check out this blog post that outlines how my 2021 predictions came to life.  

 Now, looking ahead to 2022, I foresee:   

10. One meaningful piece of legislation will be passed at the U.S. Federal level   

2021 made history with multiple cannabis legalization bills being proposed by members of U.S. Congress – most notably from Senators Schumer, Booker, and Wyden on the Democratic side and Representative Mace on the Republican side. I predict that in 2022, we’ll see at least one piece of meaningful federal legislation passed. Reform may come in the way of banking, decriminalization, or legalization, but I expect 2022 to be the year the U.S. Federal government begins passing meaningful cannabis reform.    

9. Republicans will run on pro-cannabis platforms for the 2022 midterm elections  

69% of Americans believe cannabis should be legalized for adult use, and 91% think it should be legalized for medical purposes. With a midterm election in 2022, I predict that we’ll see more republicans running on pro-cannabis platforms to meet voter interests. In the 2020 election, every state that had cannabis legalization on the ballot passed, and Republicans are noticing. But it’s not just the positive consumer sentiment – politicians recognize the economic opportunity that cannabis can bring and are acting upon it already, as shown in Representative Mace of South Carolina’s recent States Reform Act.  

8. Brands will find new ways to interact directly with consumers  

B2C companies seeking to interact with consumers in traditional mainstream industries can do so through advertising campaigns, direct eCommerce, and social media platforms. Unfortunately, many of those tactics aren’t legal options for cannabis brands as they are banned from advertising on many physical and digital platforms. Many have even faced account closures for posting organic content (a regular post without advertising spend) on leading social media platforms like Instagram. These two challenges lead to increased demand for other ways to reach and interact with consumers legally. We are currently seeing this increase in interest in our Akerna Connect offering, which allows retailers to run text messaging and loyalty campaigns. I predict that in 2022, the cannabis industry will see a significant rise in new ways to connect with consumers directly: new social media platforms, Direct to Consumer (DTC) campaigns, partnerships with local restaurants, and more.   

7. Large players in the industry will seek upgraded financial systems  

As the cannabis industry prepares for eventual U.S. federal legalization, I predict that large operators will seek upgraded financial systems to ensure a valid path to scalability. As operations grow, they quickly realize the spreadsheet solutions that enabled them to reach their first hundred thousand in revenue do not scale when the business becomes 100 times the size. Compliance is table stakes in the cannabis industry, so I predict that a critical factor in choosing those upgraded financial systems will be their ability to integrate with mandatory cannabis compliance checks, which vary from state to state and jurisdiction to jurisdiction. For public cannabis companies, I predict this adoption will come even quicker given the new SEC reporting requirements. Akerna’s ecosystem of cannabis solutions offers the most comprehensive portfolio of mainstream financial systems, which connects to our compliance engine to ensure adherence to all cannabis industry and business regulations. We saw this coming, and we expect to see in 2022 a migration of large cannabis companies from Quickbooks into more robust financial systems, like Microsoft and SAP.  

6. More cannabis companies will employ blockchain technologies 

Blockchain technologies continue to be hot topics, with cryptocurrencies and NFTs being the most noteworthy players. I predict we will see an uptick in the use of blockchain technology in the cannabis industry from operators, regulators, and ancillary players who will increasingly rely on blockchain technologies to ensure further trust, authenticity, and security of physical and digital properties.  

5. States will form joint coalitions to start to normalize regulations & prepare for interstate commerce   

As the cannabis industry waits for full federal legalization, I predict states with existing legal cannabis programs will begin to form joint coalitions or alliances to normalize regulations across state borders and prepare for interstate commerce. Interstate commerce will lead to the emergence of genuinely national brands but could pose enormous risks for boutique and cottage operators. On the other side, those small boutique, cottage, and equity operators could have the opportunity to reach fans of their brands across state lines. I hope future interstate commerce legislation will have protections for these businesses.  

4. Grassroots efforts will assist in decriminalization and clemency  

We’ve seen the power of the people influence culture and politics through various mediums, most recently in the digital #metoo movement and Black Lives Matter demonstrations. I predict that in 2022, we’ll see large grassroots efforts from the people in efforts to encourage the decriminalization of cannabis, among other issues ahead of the 2022 midterm election. The Last Prisoner Project and Cannabis in Common Campaign are two successful projects with which we’ve partnered recently whose success has been driven by the people. 

3. The cannabis consumer base will become more widely ranging  

Cannabis has been legal for adult use in some states since 2014 but has been enjoyed widely much longer. With cannabis now either legal for medical and/or adult-use access for 1/3 of Americans, I think that we’ll see the cannabis consumer pool diversify from a purchaser, product, and demand perspective. I predict we’ll see an uptick in edible purchasing from the boomer generation as more become more comfortable with modern cannabis. I also think we’ll see a continued increase in cannabis beverages as alcohol consumers turn to cannabis alternatives for a healthier drink without the hangover.  

2. Reliance on predictive data and education will increase  

With cannabis being new to many consumers, historical data can help predict future needs, but there are limitations. For instance, a new consumer may either not understand cannabis or may feel intimated by the variety of products and opt for a simple delivery method like edibles. With the proper education, that consumer could become an avid concentrates purchaser. In another example, the medical market in Louisiana just legalized flower for the first time this year, giving operators in those states no legal history of their patient’s flower preferences or purchasing. I predict instances like these will create demand for more predictive data and heightened education. Our analytics programs help operators uncover trends like these, while our Zoltrain product trains staff and budtenders on the entire cannabis supply chain, which creates a ripple down effect to the consumer. An educated budtender speaks confidently about cannabis and educates the consumer.   

1. Southern states will see economic success from legalizing cannabis 

Alabama legalized medical cannabis and Louisiana added flower to its approved products for medicinal use in 2021. As a woman from the Deep South whose family roots in agriculture go back generations in Alabama, Georgia, and South Carolina, I am thrilled to see Southern representatives advance these issues. Cannabis’ potential revenue per acre blows all of the south’s commodity crops out of the water, but that’s only the start of the number of economic benefits that come with legalization. As a commodity, cannabis will have exponentially increasing effects on the economy: $5 million in crops leads to new jobs, tax revenue, and more. I predict we’ll see the beginning of these economic benefits from cannabis in the south next year. 

Forward-Looking Statements

Certain statements made in this blog are “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. When used in this piece, the words “estimates,” “projected,” “expects,” “anticipates,” “forecasts,” “plans,” “intends,” “believes,” “seeks,” “may,” “will,” “should,” “future,” “propose” and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of significant known and unknown risks, uncertainties, assumptions, and other important factors, many of which are outside Akerna’s control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Important factors, among others that may affect actual results or outcomes, include (i) Akerna’s ability to maintain relationships with customers and suppliers and retain its management and key employees, (ii) changes in applicable laws or regulations, (iii) changes in the market place due to the coronavirus pandemic or other market factors, (iv) and other risks and uncertainties disclosed from time to time in Akerna’s filings with the U.S. Securities and Exchange Commission, including those under “Risk Factors” therein. You are cautioned not to place undue reliance on forward-looking statements. All information herein speaks only as of the date hereof, in the case of information about Akerna, or the date of such information, in the case of information from persons other than Akerna. Akerna undertakes no duty to update or revise the information contained herein. Forecasts and estimates regarding Akerna’s industry and end markets are based on sources believed to be reliable; however, there can be no assurance these forecasts and estimates will prove accurate in whole or in part.

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