Legal Marijuana Sales Reach 21 Billion Worldwide: Time to Join In?
A report published recently by BDSA demonstrates not only the robustness of today’s legal marijuana sales and the cannabis market in general. It also points to an exciting opportunity for anyone willing to join this budding industry and make use of its growth potential.
Marijuana sales worldwide exceeded $21 billion in 2020. This is an increase of 48% compared to 2019. BDSA report also forecasts marijuana sales to grow at a compound annual growth rate of more than 17% and reach $55.9 billion in 2026. Analysts expect the growth to be mostly fueled by new markets as legalization progresses.
The Reasons Marijuana Sales Increased in 2020
The growth of marijuana sales in 2020 happened for a variety of reasons, some of which were expected, while others counterintuitive, according to BDSA experts.
- New markets are key. While mature markets saw a considerable acceleration of growth compared to the previous year, it was new markets that remained the major driver of growth in the industry. They contributed $1.6 billion in spending in 2020. The same applies to the near future. In the US, four new medical and five new adult-use markets are expected to commence sales in 2021. Globally, the demand for legal cannabis will be driven by Mexico which recently decriminalized the adult use of the substance, but also by Germany, the UK, and France.
- Introduction of new product options. In Canada, the totally new segment of the marijuana industry called “Cannabis 2.0” and comprising edibles and ingestibles saw the fastest growth in 2020. Lifting the ban on these products in October 2019 boosted marijuana sales in this country. They totaled an estimated $2.6 billion and are forecast to grow at a CAGR of 16%, reaching nearly $6.4 billion in 2026.
- Lockdown-driven demand. The COVID-19 pandemic, contrary to expectations, didn’t hurt marijuana sales. If anything, it boosted them, especially in the recreational sector.
Marijuana Sales During Pandemic
The COVID-19 crisis was considered one of the major challenges the emergent cannabis industry was facing in recent years. It came as a surprise that it actually boosted marijuana sales as recreational smokers had more free time for their ‘vice’ due to lockdown measures.
“The industry not only survived, it thrived, and legal cannabis gained considerable ground, exceeding our expectations in several markets,” said Micah Tapman, BDSA’s CEO.
A positive dynamic due to COVID-19 was seen in many mature markets which saw a substantial acceleration in growth compared to the previous year:
- Colorado: 26% rise vs 13% in 2019,
- Oregon: 39% rise vs 21% in 2019.
Taxes as Approximation of Marijuana Sales
Marijuana sales data are important for cannabusiness startup creators and entrepreneurs, but obviously, it’s taxes that politicians think of when they consider (and advocate for) the legalization of the substance. This is why marijuana tax estimates are so important. They also serve as a proxy for marijuana sales projections if other data is lacking.
In the table below, you can see some actual numbers along with some juicy what-ifs (the latter show how much cash the authorities would have at their disposal if only they had enacted legalization laws and/or started to regulate and tax marijuana sales).
|State or City||Marijuana Taxes||Type of Legislation||Year of Legalization|
|State or City||Marijuana Taxes||Type of Legislation||Year of Legalization|
|New York, NY||$156.4M||Recreational||2021|
Actual and estimated marijuana taxes for US states and major cities in 2019 as provided by Loud Cloud Health.
Ways to Jump on the Bandwagon
By now we’ve probably driven our point home: that legal marijuana sales will continue to boom in the coming years and that this burgeoning industry will be a cornucopia of opportunities for cannabis enthusiasts. So how can you join in?
If you’re young, have no money, and your only asset is ‘human capital’, you’re still in a unique position because you can take any of the dozens of entry-level jobs in an industry that is developing at a breakneck pace. This will set you on a career path with virtually unlimited opportunities.
We wrote about cannabusiness jobs in a separate post. The gist of it is that, as more and more countries and states legalize marijuana, the more and more ambitious young people can find a job of their dream in an industry that will appreciate their passion for cannabis.
So be on the lookout for interesting offers, apply for special permits and licenses (if required), and send out as many job applications as you can.
Here’s a short list of positions that are available where marijuana has been legalized:
- marijuana production (cultivator, harvester, master grower, trimmer, extraction technician, master extractor, etc.),
- product testing (marijuana tester, quality control inspector, etc.),
- edibles and beverages industry (edibles chef, cannabeer brewer, etc.),
- marijuana sales (packager, receptionist or cashier, budtender, dispensary manager. etc.)
- delivery services (drivers and other specialists).
Of course, like in any mature industry, there are dozens of cannabusiness jobs where you don’t get near plants or products but can apply your other skills to ensure the smooth running of the business. These jobs could be anything—from electricians and plumbers to software engineers and designers to lawyers and compliance officers. And you still get such perks as better than average pay and the opportunity to fast track your career.
Invest in Marijuana Stocks
There is a growing list of exchange traded companies that either directly or indirectly benefit from the ‘green rush’. The former include those that grow, distribute, or sell marijuana and its products where it’s legal. The latter are involved in research or make use of the medical benefits of the plant (e.g. biotech and pharmaceutical companies).
Investing is a high risk/high reward activity and so isn’t for everyone. But if you know what you’re doing and can stomach short-term losses in hopes of having long-term gains, you may do worse than add a few marijuana stocks to your portfolio.
And if you’re not qualified to research those companies and assess their value and potential (most of us aren’t), there are several marijuana ETFs, or exchange-traded funds, at your disposal. Marijuana ETFs are a great way to get exposure to the whole sector without experiencing (sometimes bone-crunching) ups and downs of individual marijuana stocks.
Starting a Cannabusiness
The marijuana industry of today is a breeding ground for millionaires of tomorrow, but to be a part of this success you’ll have to go all-in. Starting a cannabusiness either in growing, or in the production of edibles and other marijuana products, or in selling weed through a dispensary will require at least a quarter of a million in the first year for a smallest-scale unambitious project. So even getting your foot in the door isn’t easy, but the possible rewards are worth it.
In many respects, starting a cannabusiness isn’t that different from any other business. Nevertheless, there are certain things that are unique to this industry.
You’ll need to deal with getting licenses and permits, securing funding (which could be harder than you think in an industry that is only marginally legal), and finding a way to manage your day-to-day financial operations if banks refuse to work with you.
We have covered all these aspects of starting a cannabusiness in some detail in another post. We encourage you to read it as the first step in your research.
Become a Breeder for Seed Shops
We understand that for many of our readers all of the above is hardly feasible for the simple fact that marijuana hasn’t been yet legalized everywhere. But even if you live in a state or country with rather restrictive marijuana laws, maybe you still can take part in the green rush without breaking the law.
Many jurisdictions—even if they forbid marijuana sales—allow small-scale cultivation for personal needs. In many cases, growing a few plants at home is all that is needed for a quite serious breeding project.
ALL bestselling strains of old came from somebody’s personal stock. Today, a lot of breeding is done by professionals, but amateurs contribute their lucky finds to the genetic pool all the time. Imagine hitting the jackpot with something like our Strawberry Banana Auto with her 27% THC, bud production of up to 600gr/m2, and bold fruity terps. Imagine your own strain in a major seed bank’s catalog and in every online seed shop. Finally, imagine the revenue stream this could generate.
Marijuana Sales are Skyrocketing. And So Should Your Career
To recap, marijuana sales have demonstrated an impressive growth rate, proved their robustness during economic turmoil, and are poised for aggressive expansion in the immediate future. So the cannabis industry may be your one shot for major success in life.
We have switched to a new licensing software.
For more information about this switch, visit this page.
Welcome to the Oklahoma Medical Marijuana Authority (OMMA) website. The OMMA was established to oversee the medical marijuana program for the State of Oklahoma. It is responsible for licensing, regulating, and administering the program as authorized by state law. Operating under the Oklahoma State Department of Health, the primary goal is to ensure safe and responsible practices for the people of Oklahoma.
This website is the official site for application submission and information for patients, caregivers, dispensaries, growers, processors, and physicians. All applications are processed through this site. Please check back often for updated information.
Best Ways to Grow Cannabis Sales
If you are looking to grow cannabis sales in this thriving multi-billion dollar market, you’ll need a sales process and a CRM. Here’s how you can get started.
Grow Cannabis Sales
Pun intended here, by the way! At the heart of the cannabis industry is an amazing breadth of opportunity and that’s what we’re addressing for you in this post.
As we outlined in our recent news with Lemonhaze Cannabis Convention, more and more cannabis companies are looking for the best ways to increase profits and run their business as smoothly and smartly as possible. According to BDS Analytics, 2017 cannabis industry sales totaled $9 billion which is equivalent to annual revenue from Pampers diapers. Nine billion is also equivalent to annual revenue from Microsoft’s gaming division. The BDS report also revealed the largest group of cannabis buyers are in North America and the potential growth will surge to $47.3 billion within a decade.
According to respected media source Forbes, which has covered cannabis businesses in depth, the cannabis industry will outpace the manufacturing sector in new job creation in just a few years. That’s more than 250,000 new job in the industry ranging from trimmers, grow site operators, budtenders, marketers, and, of course, salespeople.
Throw in the changing social tide to all of these aforementioned proof points and it’s easy to see why top cannabis producers and processors have been shifting their focus to a different kind of growth mode.
Cannabis SALES Growth and competition
As the fundamental logistics of production, delivery, and financing iron out at a rapid pace, the cannabis industry becomes a challenge for sales teams and marketeers who are pushing front and center within the burgeoning industry.
This push towards more sophisticated cannabis sales and marketing efforts at the producer, processor, and wholesaler levels has led this “unconventional” industry toward a very fundamental issue: hiring quality sales and marketing professionals, in order to accelerate growth.
Given the youthfulness of the industry, there isn’t much data on the best prospective fits and how to identify them. It’s sort of a wild wild west.
At the same time, it’s an incredibly competitive space. Now is the time to define what makes your product noteworthy. This is where the marker meets the whiteboard. Your sales team should have a clear directive on how to position your product line. What is the story you want to tell? Make sure it’s the same throughout all interactions when selling your product(s).
A fully differentiated product offering will resonate with the consumer. First and foremost, your special product must resonate with the dispensary whose shelf space you are after.
Take control of your cannabis brand.
It is a good idea to reaffirm your brand value on a regular basis. We suggest a quarterly review that involves stakeholders. Your brand will evolve over time. So, it is important that the evolution is visible and understood by everyone throughout the organization.
As time goes on, the industry will mature faster. Selling into new retail shops, solidifying relationships at existing shops, managing reorders, and communicating your value proposition will be part of sales and marketing job descriptions. Managing demand, delivering product, and maintaining quality will be the priority for the operations teams.
As you take control of your cannabis brand, you’ll need to take control of your cannabis sales. Read on to find out how.
CRM Software for Cannabis Sales
One of the best ways to increase cannabis sales is to invest in customer relationship management (CRM) software. It is the best way – and proven way – that sales teams can seamlessly communicate on all new orders, keep track of samples, and ensure last minute deliveries arrive. It’s software to accelerate sales and the cannabis industry is just like any other in this regard. If you have a sales pipeline to grow, you can grow it faster and better with technology.
In fact, our CEO, JP Werlin spoke to this very topic when he participated in the Technology Panel at the Lemonhaze Convention in Tacoma, Washington. Along with other software company leaders, JP spoke to the value that technology plays to grow a cannabis business.
“How are you organizing your people to take advantage of the technology? If you’re not thinking about the people and the process along with the tech you are ignoring the whole spectrum of how to sell more faster… If you can weave the tech people and process all together you will have a distinct advantage inside of your business.”
– JP Werlin, CEO of Pipeline CRM
What does a Cannabis CRM do?
With a CRM in place, you’ll gain instant oversight of all ongoing sales conversations. You will know the answers to these questions instantaneously:
- Who has a sample in hand?
- What is the average conversion time from sample to order?
- Average order size?
- Average reorder size?
Placing all retail shops into a CRM allows for straightforward customer targeting and on-demand analytics of your market presence. Placing all of your shop contacts in a CRM system allows for simplified follow up. You can understand which client you haven’t you spoken with recently. You’ll know which shops are just outside your territory today but are worth staying top-of-mind. A good sales CRM will make all of these opportunities visible and easy to act on when you need to act.
On top of that, you can leverage the power of targeted shop communications to move products by sending special offers. On average, we’ve seen customers improve margins by 10 to 15 percent.
Track Potential New Sales Opportunities
We on-boarded our first cannabis industry client in 2017 and since then we’ve seen some interesting sales patterns. We find that more than 65 percent of cannabis industry producers and processors aren’t tracking potential sales opportunities in any formal manner but want to!
With a CRM, you’ll see a clear and immediate impact on the reach of your business. For starters, you’ll have all the data, for example shop data, in one place. A single source of truth. This brings a sense of transparency to everyone in the business.
You can segment those that have placed an order from those that have not. That equates to moving ahead to the next win for your business. You’ll know what percentage of the market you have penetrated and which of your products are moving at the highest rate. In the cannabis industry, those answers had been typically confined to clunky ERP systems or government mandated seed-to-sale software that lacks a friendly user experience. Times have changed and gleaning those game changing insights is easier than ever.
Build Game Changing Relationships
Another key factor to cannabis sales opportunities is business relationships. Your company’s relationships with budtenders and general managers make such an impact on your bottom line. Having a record of your conversations is critical. You can’t possibly remember every conversation with every contact. That’s what a CRM is built for, keeping the data you need accessible. When you do follow up, you’ll have the details you need at your fingertips to close a sale and give clients what they need.
Keeping up with relationships is also about establishing clear touch points. Let’s take those budtenders. They are the gateway to your product. They spend the majority of their day making recommendations to consumers. Due to the fact many states have strict regulations on sample quantity, it can be difficult for everyone to experience your product.
This can lead to knowledge gaps which ultimately slows your brand’s growth. Regulatory hurdles aside, it’s critical to have strong relationships with the shops you are distributing. Even if that relationship doesn’t include samples for the entire staff.
To address this, your CRM should have customer management features. It is a revolutionary way for producers and processors to solve the problem of standardizing touch points and monitoring the health of existing relationships.
Another key concept for producers/processors is milestones. Milestones in a CRM are the key events within the lifecycle of a customer that you’ll want to be tracking.
Cannabis SALES: Email Marketing
Email is a critical component of marketing and sales for any type of business. Why? Email marketing is a low-cost, low-effort, and effective way of getting in front of customers who are truly interested in your product. Email marketing is a great tactic to deploy when you want to actively engage with retail stores.
Make sure you build email lists. It will be an ongoing process. As you do that, you can use those precious lists.
Email Content for Cannabis Sales
What should you be emailing your lists? The next step is figuring out the content. It’s more than just highlighting your products. You need to create content that your client base would value and find educational. Think about highlighting practices and technologies that will help dispensaries to improve their businesses.
Through your CRM and an email integration (like Mailchimp ) you can send targeted email campaigns to shops. This enables sales reps to spend more time visiting and calling, rather than crafting emails.
Within Pipeline CRM, campaign results (opens, clicks, downloads) are tracked both in real-time and can be analyzed in a digestible report. These campaigns are shown to increase margins and frequency of reorders. That’s because they show exactly which emails are resonating with shops. With an easy-to-use sales CRM, you’ll be able to get a snapshot of new sales with email tracking. You’ll get a clear history of client interactions at the click of a button. These functionalities should always be available via desktop and mobile.
Understand your contacts
Recreational and medical shops are retail environments, so turnover happens. That can make connecting with the right person challenging.
A cannabis CRM should allow for more than just tracking who you’ve worked with in the past. With the Key Contacts feature in Pipeline CRM, for example, our clients can focus in on their most valuable relationships. This type of visibility eliminates confusion in your business and create a smoother experience for your customers.
Keeping note of key contacts is pretty much standard practice in almost any “traditional” industry. Most sales teams utilize CRM software to facilitate this process. Unfortunately, that technology has not yet been embraced within the cannabis industry. Unsurprisingly, the dramatic growth that many have experienced has left many of the industries top participants struggling the put in place fundamental tools and process.
EXECUTE A communication plan
So you’re keeping track of key contacts. Great. Now, your communication with them should have a plan. Here’s a sample of the information salespeople should be collecting during their regular check-ins.
- What’s selling? Any noticeable market shifts?
- What products are getting the most traction? Competitors or otherwise.
- How are budtenders positioning your offerings?
- Inventory status
If we are operating on a four-week-reorder cycle, best practice should include a two-week check-in via phone. The power of a CRM is in automating the reminders to complete these mundane tasks. This will enable your team to focus on exponentially growing the business through making more connections.
If you are selling into a new shop, it’s critical that all interactions are logged. No one likes a forgetful sales rep. It’s just as important to follow up in a consistent manner. That’s, again, where a CRM comes into play.
The recommended cadence for calling into a new shop will vary. However, with a good CRM you can automate how you schedule outreach. Place formal stages for tracking samples (not on the regulatory side, but on the sales side). This type of organization provides clear visibility and helps your team navigate potential opportunities in an efficient and orderly manner.
Analyze Reports to Improve Cannabis Sales
With a sales CRM, producers and processors can compare the performance of SKUs, sales cycle length, revenue by month, revenue by region, and just about any other custom variable they desire.
The primary focus has been getting away from clunky ERP and seed-to-sale reporting, which is ultimately not actionable for sales reps. New and improved CRM insights have enabled producers and processors to make fast decisions.
Ask a grow site manager what their yield was for a harvest six months ago. They’ll probably know down to the gram. They’ll also know their yield per square foot
Ask a cannabis sales manager about their metrics. The story is often very different.
Raise your hand if you have a clearly documented process for logging sales calls. Keep your hand raised if you know the average sample to order rate. How about the average sales cycle length or average sale value?
If you do not know these metrics, you should. They, along with a number of others, are key performance indicators (KPI) within your industry. Building these reports into the fabric of your business early will play a big role in sustaining
In order to properly track these metrics, it is important to find a CRM partner that can set up a system of KPIs to keep you informed on the health of the business. Thankfully, there are resources and consulting services to help you do that. Over the years, we have regularly worked with cannabis businesses to help them understand which KPIs are most important and to develop the reporting that allows them to be tracked.
Manage accounts like a boss
Relationships are and will continue to be the key in the cannabis industry. This is true at every level of the business, from executives all the way through
to the trimmers.
Account management refers the management of sales and relationships with particular customers. An account manager maintains the company’s existing relationships with a client or group of clients, in order to remain a
If current market trends develop as expected, dominant brands will begin to emerge in the industry. As I wrote earlier in this post, brand is important. To effectively leverage your brand, you must convey it and reinforce it with your relationships on a regular basis. This is precisely where account managers come into play. An effective approach will feature one account manager per 25 to 35 retail stores. This number can fluctuate based on order volume and frequency and can also be sliced on a revenue basis but starting with a simple rule is likely best as you scale your efforts.
Account management is a hybrid of sales and support skills. It requires in-depth knowledge of all areas of production, packaging, and fulfillment so that they can filter and translate that to their key accounts.
Grow cannabis sales steadily
The market is here to stay and demand grows by the month. To thrive in the face of this opportunity, and its inevitable challenges, companies need to double down on proven strategies for business growth.
Create a process to get new sales in the door. Manage those relationships so they last. Build a recognizable brand. And monitor KPIs to understand the health of your business. For any business looking to grow in this new market, these foundational pieces can’t be considered optional.
This technology is all about efficiency. If your sales team needs to communicate with production, that would traditionally involve walking down to the warehouse or production lab to relay a message. Not the best usage of time.
The cannabis industry is still in its infancy, but already the competition is steep. With growth anywhere near where it’s projected to be in coming years, the intensity is only going to increase.
There are a lot of things that go into creating a successful business in a wide open market. Even then, there’s no guarantee. With these tools as a foundation, cannabis operations can set themselves ahead of the competition and position themselves to compete as the market grows.