Rise of the Tech World with the Social Acceptance of Marijuana
The tech world is bolstering the cannabis industry. As the acceptance of cannabis becomes more socially ingrained, tech platforms are playing a bigger part in the industry’s development. In our digitally connected world, technology is the key to greater publicity, wealth, and to a large extent, development.
The Cannabis Industry & Tech
Overall, the global legal cannabis industry has grown rapidly in recent years. It’s still no “global industry” in the true sense, but the difference from just a couple of decades ago has been enormous.
For most of our lifetimes, the development of the cannabis industry has been slow or non-existent. Global restrictions and classifications of cannabis as a schedule one or two drug have placed limitations on all aspects of the industry. This illegality created a lag in all areas of the industry and has had consequences for decades to come. Those include:
- Research for various medicinal applications, especially therapeutic impacts
- Exploration of industrial development, including CBD and hemp
- Quality control metrics, standards, and practices
- Barriers to legal entry
- Banking and financial issues
- A complex legal landscape requiring ongoing attention
- The stigma surrounding all of the above
One issue that this list doesn’t touch on and is often unexplored is how the tech industry interacts with the cannabis industry.
Cannabis and Tech: Were They Meant to go Together?
Despite the many severe challenges, tech has already played a huge role in the development of the cannabis industry.
First, as legalization has taken place, cannabis businesses have become more willing to move into mainstream online spaces. For medicinal and therapeutic uses first, then for recreational use as well, tech has streamlined industry processes.
Let’s look into the specifics of different steps in the supply chain.
Growing and Harvesting
Legalisation has given cannabis businesses access to high-quality cultivation technologies, leading to the development of new innovations.
The application of the improved tools and methods for growing and harvesting is accompanied by analytics. Access to the tech market enables growers to quicken harvest times and maintain a higher quality, both of which are more easily and quantifiably measured.
Individual technological improvement examples include:
- Remote sensor use for plant growth
- Enhanced extraction
- Automation of processes for growing and harvesting
- Cannabinoid biosynthesis
Marketing, Sales, and Quality
Yes, we are skipping all the way down the supply chain. The reason is that quality control and customer feedback are connected. In the illegal market, the collection of “quality control” information was ad-hoc and informal. Now, businesses can receive comprehensive feedback for meeting various market segment requirements.
For example, people with specific conditions purchase specifically marketed cannabis products for their conditions. The merchant’s IT tools enable fast, transparent, and comprehensive feedback. These processes can be recreated for a wide variety of medical and recreational uses.
The above enables growers and merchants to improve all their SOPs:
- Growers produce more fine-tuned produce
- Marketing teams more accurately match customers with the products they need
- Sales processes are streamlined and improve ROIs
- eCommerce technology (a $10 trillion+ industry!)
This may not touch on the legal aspect much. But broader appeal through quality control and enhanced marketing and sales processes is one of the keys to the industry’s growth.
Last but not least, cannabis businesses now have access to Google Maps, Yelp, and many other popular platforms. The significance of the recent access to these tools is incalculable but certainly monumental.
Legality and social acceptance have greatly affected traceability, management systems, and logistics overall.
Management systems that are applied across many mainstream industries are now bolstering cannabis. One big example is access to the immense inventory management industry. Inventory management systems alone enable more efficient and legally compliant business operations.
Applications have been key tools for businesses across all industries. They saved many businesses throughout the COVID-19 pandemic, including cannabis businesses.
Many applications were able to fill the need for the facilitation of deliveries or curbside pickups. Apps can be changed as needed, and that ability was tested globally as changes to social distancing norms and movement restrictions occurred globally. In legal cannabis markets, applications played key roles.
In addition, cannabis applications enable many processes:
- Cannabis maps
- Cannabis business reviews
- Pickup and delivery
- Knowledge provision/strain suggestions
- Communications platforms (between consumers, businesses, pharmacists, healthcare professionals, and others)
This one is still one of the greatest challenges.
In the US, some banks and other financing institutions will service cannabis businesses. That means both regular banking services and access to necessary funding. But traditional capital markets are still out of reach in many cases. A lack of established credit history is one of the largest challenges for new cannabis businesses.
Here, tech is again bridging some major gaps in this capital-intensive industry. Take the examples of online lending platforms, blockchain and crypto solutions, and payment processing solutions that specifically account for the federal illegality of cannabis. Tech solutions connect cannabis businesses to these resources. They also connect them with incubators and other alternatives.
There is a specific advent of funding platforms and marijuana startups provided by the overlap between the cannabis and tech worlds. For example, Leafy is essentially the cannabis-specific version of Yelp. There’s also Weedmaps, a B2B cloud-based software and data solutions company for cannabis businesses.
Needless to say, these tech solutions would be impossible to pull off in the previous illegal cannabis industry.
Conclusions: Effects on the Market
There is little hard (and direct) quantitative evidence on how these changes affected the cannabis market cap. However, we can see correlations that are far from coincidental. Access to technological solutions affected everything from growing to the end customers’ experiences.
Increased consumption of medical cannabis is the main source of growth in the industry. During the pandemic, the cannabis industry grew even faster than in previous years.
According to one study, the cannabis industry grew 50.92% in 2020. Growth projections from academic and business sources are almost universally highly optimistic for the next decade. Most project at least 6x growth from 2021 to the end of the decade. Looking at the data alongside trends in legality and technological innovations, you can draw your own conclusions.
Specific data aside, the fact is that social acceptance of marijuana and increased access to tech solutions have transformed the industry. This trend is still taking place, and there is no reason to believe it will slow down soon.