How Nevada is Setting The Stage For The Future of Cannabis Industry
Cannabis sales across the United States are seeing a rapid growth as more Americans are provided access to legal cannabis.
So far, 30 states have approved medicinal cannabis sales and nine states have legalized its recreational use. The market is showing no signs of slowing down. Experts say cannabis sales is on track of reaching $80 billion by 2030.
All Eyes on Nevada
One state that has caught the eye of many investors is Nevada. While relatively new in the market, the state is rapidly establishing itself as a leading player in the cannabis industry.
In 2018, retailers have sold about $530 million worth of medical and recreational cannabis. That’s an average of $44.1 million per month! In 2017 the average was $32.6 million per month.
It is quite impressive considering cannabis sales only became legal in Nevada in 2016.
Nevada’s sales generated total economic benefits of almost $1 billion in the state. This figure could hit a whopping $4.9 billion by July of 2024, according to expert estimates.
Two factors are attributed to Nevada’s strong cannabis sales:
Nevada’s early start program.
Over 55 million visitors travel to Las Vegas each year. This flow of visitors pose an ideal opportunity for an even wider cannabis exposure.
Nevada’s medical cannabis law recognizes non-residents who are qualified under their state laws. Nevada dispensaries are authorized to sell to patients from other medical marijuana states. The patient needs to present a government-issued medical marijuana card from his or her resident state.
Analysts say annual legal cannabis sales in the state are projected to grow to an estimated $629.5 million by 2020.
A similar growth trend is seen across the country. In the U.S., cannabis sales are registering a compound annual growth rate of 28.2 % over a decade.
To be able to respond to the cannabis demand, producers will need to scale significantly on its production.
A Challenge For Growers
As the most important part of the industry, cannabis growers are doing their utmost best to meet the growing demand for cannabis. Across the country, more companies are now focused on developing large-scale cannabis cultivation. More sophisticated cannabis farms are being built in states such as Arizona, Colorado, California, and Oregon.
Of course, not every state can just build a cannabis farm. It is important that cultivators first secure cultivation licenses. These licenses determine which growers can cultivate and dispense in their states.
To be able to operate, businesses are required to secure these cannabis licenses:
Product manufacturing facility
Marijuana testing facility/independent testing lab
Distributor (adult-use only)
Retail marijuana store/medical dispensary
The competition for licenses is fierce. Firms with licenses are expected to earn more especially in states with limited cultivation licenses. This is because licensed cultivators will be able to sell their product in large volume.
So far there were 659 final medical and adult-use certificates/licenses issued. As of January 2019, 245 provisional/conditional certificates/licenses have been granted in total.
In December, Nevada awarded 61 conditional adult-use retail licenses to 17 separate businesses. This doubles the number of recreational stores in the state.
OrgHarvest is among companies establishing itself as a potential leader in the sector. It has secured the Nevada cannabis licenses that many of its competition currently lacks. The company is now working on a massive cannabis production operation in Las Vegas.
The shift to indoor cultivation
The sudden spike in cannabis demand has resulted in shifts in techniques in cannabis farming.
Traditional outdoor cultivation is still common. Many cultivators are still tilling acres of cannabis farms across the country. However, there has been a significant rise in popularity of indoor farming in recent years.
Technology has improved from growers’ early attempts at indoor farms. Cultivators are now able to grow cannabis in state-of-the-art indoor warehouses. These clean-room environments resemble pharmaceutical production facilities more than traditional commercial agriculture.
Since indoor cultivation is not limited by the changing seasons, growers could produce cannabis at any given period. This way, cannabis can grow all year round. A well-run facility can produce more cannabis than an outdoor farm by harvesting multiple times throughout the year.
Technology as a solution
Aside from the better yield, indoor cannabis cultivation also offers complete control to the growers. In a controlled environment, cultivators are able to adjust various factors affecting the growth of the plants. Growers can control the amount of light, air flow, soil, and even the nutrients that the plants need.
This is helpful in creating the ideal environment for research and development. Growers are now able to preserve unique genetics in cannabis plants. Indoor producers can then target a trait in upcoming generations of the plant's life cycle.
Another challenge to outdoor cultivators is the need for standardization of cannabis. This is needed to gain approval in the pharmaceutical sphere. It allows cannabis to be reliable during clinical trials.
Indoor growers are already way ahead of this as they are able to dictate every aspect of their growing procedure. They use careful monitoring and adjustments of water, light, humidity, and pest management, among others.
Ready to take the lead?
Cannabis businesses tapping on the Nevada cannabis industry are already looking at huge returns. It is a young market. But it has a huge potential for growth. The state is now garnering significant attention from investors, manufacturers and researchers.
Local firms are now in a position to utilize every tool in their arsenal to pivot the state into a leader in the nation’s cannabis industry.
Firms, such as OrgHarvest, need only maintain their momentum in producing high quality products while developing effective marketing strategies.