Looking ahead to 2025, the cannabis industry is poised for significant change. New regulations, evolving consumer preferences, and market forces will reshape how cannabis businesses operate. From cultivation to retail, here's what we expect to see in the coming year.
To help shed light on what’s next in cannabis, our SparkPlug cannabis experts shared their predictions on the top trends affecting the cannabis industry in the coming year.
Trey Smith shared his thoughts on what the coming year will bring.
Market Consolidation Reshapes Major Markets
2025 will mark a significant shift in cannabis markets like California and Michigan, where increasing price pressure and heavy competition will drive consolidation. Multi-State Operators (MSOs) are expected to dominate through strategic mergers and acquisitions, changing the competitive landscape. Brands will face increasing pressure to either scale up or specialize in order to survive. Success in these mature markets will depend on clear differentiation strategies, whether through craft quality, niche products, or strong local branding. This "grow or specialize" environment will particularly impact businesses operating in established state markets.
Consumer Preferences Evolution
A notable shift toward wellness-focused cannabis products is anticipated in 2025. The market will see increased demand for low THC products, microdosing options, and CBD blends. Consumers are increasingly seeking balanced ratios of THC and CBD for daily relief, relaxation, and functionality. This trend reflects cannabis becoming more integrated into everyday wellness routines, with consumers looking for consistent, controlled experiences. Brands that can deliver reliable, low-dose options and clearly communicate their effects will likely emerge as key players in this evolving market segment.
Global Market Expansion
Two markets will particularly shape the global cannabis landscape in 2025: Germany and Thailand. Germany's movement toward recreational legalization is expected to catalyze explosive growth across Europe, creating significant opportunities for both local and international players. Meanwhile, Thailand is establishing itself as a leader in medical cannabis and cannabis tourism, attracting substantial attention from global investors and travelers. These markets will serve as crucial models for international cannabis expansion, offering valuable insights for businesses looking to expand globally and potentially setting standards for other countries considering legalization.
Matt McDowell shared his thoughts and hopes for the industry in 2025.
Market Consolidation Accelerates
Major market leaders in established states like California and Michigan are expected to continue consolidating through 2025. This trend, already visible in the industry, will likely intensify as companies seek to strengthen their market positions and achieve operational efficiencies. The consolidation wave reflects the maturing of these markets and the need for companies to achieve economies of scale.
New York Emerges as a Key Growth Market
New York's cannabis market is poised for explosive growth in 2025. With new dispensary licenses being issued regularly and retail locations opening weekly, the state is expected to see unprecedented expansion. Monthly revenue projections suggest continuous record-breaking performance as the market develops and matures, making New York a crucial focus for industry players looking to expand their footprint.
Alternative Cannabinoids Take Center Stage
2025 will likely see a significant shift toward alternative cannabinoids like Delta 8, Delta 9, THCA, and HHC. Companies are increasingly attracted to these market segments due to their unique advantages over traditional cannabis markets. The ability to ship directly to consumers and utilize mainstream advertising platforms like Instagram presents compelling opportunities. This sector offers fewer regulatory restrictions, allowing for more flexible business strategies and potentially wider market reach.
As we navigate the cannabis industry together, may the year bring forth positive developments and continued advancements that contribute to the well-being of individuals and communities. Here's to a year of progress, understanding, and the flourishing of a more enlightened cannabis future.
All of us here at SparkPlug are excited to see what everyone has in store for 2025 and we will be along for the ride!
Connect with SparkPlug today to discover how we can keep your cannabis organization ahead of the curve.
