The end of the year is near. But what a year 2024 was.
First, the trend that wasn’t. The industry entered the year with high hopes that the plant would be moved from Schedule I to Schedule III, which could open more opportunities for investment and growth. But as the months rolled pass, action faced several delays – with the latest moving an administrative hearing on the issue into 2025.
Despite that, the cannabis industry continued to evolve.
New markets toward the East gained ground, while some elder brethren in the West ran out of room for any new operators. The South lies dormant for now, though many of its newbies lie in wait, licking their lips at the first chance to pop out and do their stuff.
Hemp, however, waited for none. Whether it’s open-air transactions at smoke shops, gas stations and even cafe-styled THCA smoking and beverage consumption lounges, the category has been taking advantage of a freer regulatory framework than what its cousin, marijuana, faces.
Wins should be counted, of course, not least among them Nebraska’s emergence as the 39th state to legalize medical marijuana. The voters in the Midwestern state delivered a decisive mandate, with more than 70% supporting personal use rights for medical purposes and 67% backing a regulatory framework.
So far, the measure has survived the legal challenges being tossed at it, but opponents in the state don’t appear ready to rest just yet.
The year also saw a cooling of the legalization momentum that has defined the past decade. In Florida, dreams of recreational use hit the familiar wall of constitutional requirements. The Dakotas, too, kept their doors firmly shut, as voters in both North and South rejected adult-use measures.
Market observers also were caught off guard by Vireo’s megadeal, which featured a rollup of four geographically distinct but successful operators into a new MSO powerhouse.
“For those of us who’ve been watching the scene, it all kind of made sense,” Viridian Capital Advisors recently said. “Most of the consolidation we have been seeing is intramarket consolidation – operators in Missouri, for example, combining to gain scale and bargaining power.”
But the traditional MSO playbook faces scrutiny, too. Some think the Vireo merger points to a future cannabis landscape split between large corporations and smaller craft brands, a view Viridian shares. The firm expects more consolidation ahead, driven by the economics of the industry that push companies to either get big or specialize.
“Of course, it begs the whole MSO question of where is the synergy or gains from scale are if each unit still has to stand on its own inside a state silo,” Viridian observed. The answer might lie in financing access, the firm suggests, pointing to Chicago Atlantic’s semi-controlling interest in Vireo pre-deal.
[[{“value”:”Despite delays in federal regulatory changes, the U.S. cannabis industry continued on a path to maturity.
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