The future success of the cannabis industry is directly tied to decriminalization and regulation. That’s among the topics being discussed at the 2022 Benzinga Cannabis Capital Conference in Chicago.
The federal landscape, though, is changing, and Curaleaf Holdings Inc CURLF founder Boris Jordan is hopeful that by the end of 2022, the marijuana industry will be officially recognized as a legitimate industry in the U.S.
“We’ve never been closer to getting real cannabis legislation, this could be something that breaks the glass ceiling for the industry,” Jordan said at the Benzinga Cannabis Capital Conference on Wednesday.
“I think we get [legislation],” he added.
Jordan explained that Curaleaf is moving into cannabis-infused drinks, and is testing its first cannabis seltzer, named “Endless Coast” in Massachusetts.
“Beverages are the big prize,” the founder said, “the problem with beverages is you have to build a lot of infrastructure — so you can only build out in states that have a high-density population to justify the investment.”
According to U.S. data from Headset, the cannabis beverage market share has increased by more than 20% in the last two years.
Curaleaf is uniquely positioned with Endless Coast within the high-growth product category in one of the most mature adult-use markets on the East Coast.
“Personally, five to 10 years out, I think cannabis beverages will represent 50% of the industry,” Jordan said.
When marijuana gets rescheduled, Jordan said that big tobacco companies like Philip Morris International Inc PM and Altria Group Inc MO will be known as cannabis companies.
“We’ve heard Senator Chuck Schumer say that he will do anything to keep tobacco companies out of cannabis,” Jordan mentioned, “but, I’ll make a prediction, the minute that marijuana gets rescheduled, tobacco companies will be known as cannabis companies.”
Cannabis investments by the tobacco industry are not new — Philip Morris made a $20 million investment in Israel-based Syqe Medical, which created a cannabis inhaler for medical use, in January 2016.
Through its venture arm, Imperial Brands PLC IMBBY made a 2018 investment in Oxford Cannabinoid Technologies, a biotechnology company with a focus on cannabis.
Altria, the firm that owns the Marlboro cigarette brand, invested $1.8 billion in Cronos, a global cannabis business with headquarters in Canada.
2019 saw Imperial Brands make a $123 million purchase for a 19.9% ownership stake in Canadian company Auxly Cannabis.