As my colleagues Brent Hull and Paula Durham noted in their recent article “The Rescheduling of Cannabis: business and Tax Implications”, today Ocean Tomo, a part of J.S. Held, released the 2024 Cannabis Industry Report. The report provides an extensive overview of the industry’s growth, challenges and opportunities, and is the result of a collaboration between Ocean Tomo’s intellectual property specialists and J.S. Held’s Environmental, Health & Safety (EHS) and Corporate Finance experts, offering a multidisciplinary perspective on the cannabis sector.
The Cannabis Industry Report features six key predictions for the industry, including the increasing reliance on mergers and acquisitions (M&A) for long-term growth and the potential impact of reclassifying marijuana from a Schedule I to a Schedule III drug. The report also identifies six critical factors influencing the cannabis market, such as regulatory complexities and the importance of intellectual property protection.
“The cannabis industry has undergone significant transformations, evolving from a budding market to a booming sector with complex regulatory frameworks and increasing acceptance,” said Brent Hull, an Analyst in the Management Consulting and Valuation practice of Ocean Tomo, a part of J.S. Held. “Intellectual property has emerged as a critical factor in the industry’s growth, providing companies with the means to protect their innovations, maintain competitive advantages, and foster brand recognition. Despite the opportunities, the cannabis industry faces unique IP challenges, complicating the enforcement of IP rights.”
James E. Malackowski, Co-founder and Senior Managing Director of Ocean Tomo, a part of J.S. Held, provides insights into the future of M&A in the cannabis industry. “Despite financing challenges, companies increasingly rely on M&A to support long-term growth in this category,” said Malackowski. “Several trends are shaping the future of M&A in cannabis, including the push for vertical integration, geographic expansion, and consolidation among multistate operators, among others.”
Dr. Patrick Kerzic, Principal Toxicologist and Senior Technical Fellow of Industrial Hygiene at J.S. Held, offers insights into the science of cannabis. “The use of cannabis, regardless of method, is associated with euphoric and relaxing effects, as well as anxiety in some cases,” said Dr. Kerzic. “The method of use may make dosing difficult, as key variables such as THC content are often unknown and delayed effects (as with edibles, for example) may lead to increased use.”
Paula Durham, Corporate Finance Director at J.S. Held, emphasizes the challenges faced by the cannabis industry. “The cannabis industry faces challenges due to variance in supply, demand, pricing, and financial leverage,” said Durham. “The federal tax code adds further complications along with the lack of support from the US bankruptcy court. Even with cannabis industry expansion and reports of skyrocketing revenue, large and small industry players are feeling distress.”
Ocean Tomo’s Industry Analysts remain at the forefront of significant trends and developments in the Cannabis industry. In my role both overseeing the Industry Analysts I find our continued collaboration with J.S. Held experts adds valuable subject matter expertise to our industry reports and client projects. Ocean Tomo holds a unique position allowing the combination of deep intellectual property expertise with the specialized knowledge of J.S. Held’s scientific and corporate finance professionals that is showcased through our industry reports.
To explore the report and discover how it could influence your business, please contact me at +1 312 377 4426 or [email protected].
