Supporting businesses and industries are growing right alongside the cannabis industry. In fact, the cannabis market has a high multiplier-effect, which is attractive to many companies considering entering the market. The multiplier effect, meaning for every dollar spent on the sale of cannabis several more are generated, has been estimated to be as high as four, meaning that the almost $7 billion in sales in 2016 had an economic impact of $21 billion. The industries and businesses emerging to support the cannabis industry are countless, and over the past several years, name brands have entered the cannabis industry by developing supporting products. These major brands are seeing the potential in cannabis and are hungry for a slice of the economic pie.
|HP and Flowhub|
Earlier this month, the world received news HP would be partnering with Flowhub to create a more efficient software to streamline dispensary operations while simultaneously addressing compliance requirements. Based out of Denver, Flowhub was created by a former compliance officer from the cannabis industry who saw the need for better compliance software and worked with a team to develop an automated system which communicates with state regulators. HP will be packaging a customized version of its ElitePOS hardware with Flowhub’s compliance software, offering efficiency with a sleek hardware design from a household name.
HP, however, is not the first tech giant to enter the cannabis market. In 2016, Microsoft teamed up with KIND, a California-based technology company, to create KIND Government Solutions. The software, which runs on Microsoft's Azure cloud, was designed for governments and regulatory agencies to monitor cannabis compliance. Last year, IBM submitted a proposal to use a blockchain to track Canadian cannabis sales. The proposed blockchain would follow the entire lifecycle, from seed-to-sale, and be accessible to anyone, including the consumer and government.
|What Name Brands Mean for the Industry|
Besides offering a new, well-needed product to the cannabis market, the partnership between HP and Flowhub brings a validity, and acceptance of cannabis programs from a brand-name to the public. There is no doubt the cannabis industry continues to have a negative stigma surrounding it. Because cannabis is still federally illegal, many people outside of the industry do not have an accurate understanding of cannabis and the programs which support it. Also, due to its illegality, the industry has been mostly fueled by start-ups, with household-names steering clear of the industry. However, with the emergence of name brands, such as HP, entering the market, some may take on a new perspective of the industry as tech-giants, amongst other companies, enter the market.
|Countless Opportunities to Enter the Industry|
Technology isn't the only supporting industry to the cannabis market and is also not the only industry in which other name brands have partnered with or invested in to enter the market. Constellation Brands, a US-based beer, wine, and spirits creator (of drinks such as Corona beer, Robert Mondavi wine, and Svedka vodka), recently invested in the Canadian-based Canopy Growth. Canopy, which is the largest producer of cannabis in Canada, is working with Constellation to develop non-alcoholic cannabis drinks, which should hit the market when infused products become legal in Canada, potentially in 2019.
Currently, GW Pharmaceuticals, another Canadian-based company, has a drug being reviewed by the US FDA. The review, which should be completed in June 2018, is of GW's Epidolex. Created to target seizures in children, and with CBD as an active ingredient, the approval of Epidolex could be a significant advancement for the cannabis industry of the world.
There are countless opportunities for brands to enter the cannabis market, despite what industry built their expertise. The introduction of well-known alcohol and pharmaceutical companies into the cannabis market would have far-reaching effects for the industry and the economy, however, this is not where it stops. As a new industry in its infant stage, there is endless room for growth and improvement, thus untapped opportunities for companies to enter. An established brand emerging into a new industry would ensure the necessary capital and resources for not only success, but also the consumer acceptance of and experience with those brands.