The growth of the cannabis market on the East Coast began in late March 2021, when New York became the latest state to legalize cannabis for adult use, joining other Atlantic states such as New Jersey, Maine, Massachusetts, Vermont, Virginia and Washington.
In doing so, it has opened the door to an industry that many experts believe could exceed $7 billion a year once the market is fully established. The cannabis market hasn’t seen this much potential since Washington became the first state in the Pacific to legalize cannabis for adult use nearly 10 years ago (quickly followed by Colorado, then Oregon in 2014 and California in 2016).
Unfortunately, the leaders of this great country have not yet followed suit and cannabis remains illegal at the federal level. For cannabis market participants, this means that state-licensed cannabis businesses must grow and sell their products in the state where they are licensed. Nothing can cross the boundaries of the state. Even if a company is licensed in both Vermont and New York, it cannot transport products from one state to another without violating federal law. Most players in the East Coast cannabis market see this as a negative.
Virginia is the first state in the South to legalize cannabis use for adults.
While this certainly complicates matters, a small group of farsighted investors and entrepreneurs see it for what it really is: an opportunity to get in on the ground floor and establish state-specific breeding operations and other growth points in the value chain where there are currently few, if any. Let’s take the current state of the cannabis market on the East Coast as a springboard. The sector is now defined by state borders. But when the federal government eventually legalizes adult-use cannabis across the country – and it’s only a matter of time before that happens – those state boundaries will essentially disappear. If they succeed, the bridgeheads created will become infrastructure for the entire east coast.
Take Virginia, for example. It borders five states that have legalized medical cannabis but have not yet moved to adult-use sales (West Virginia, Maryland, Kentucky, Tennessee, and North Carolina). The Virginia-built manufacturer can now serve not only these five states, but other related markets, including Pennsylvania, Ohio, South Carolina and even Alabama, Georgia and Indiana. A relatively small investment today can pay off tremendously in a few years when the market literally opens up.
It is this incredible potential that makes the growth of the cannabis market on the East Coast one of the most significant developments of the past five years. And while the potential scale of grow operations and other cannabis-related businesses is certainly important to talk about, let’s not forget that niche products are still in high demand in the East Coast cannabis market.
If the past decade has taught us anything, it’s that consumers are willing to pay more for high-quality, organically grown cannabis. Both newcomers and long-time cannabis enthusiasts will choose – and even demand – high-quality, organically grown cannabis that looks, smells and tastes fresh and doesn’t rely on fertilizers, heavy metals or dangerous pesticides. They also enthusiastically support brands that are committed to sustainable and environmentally friendly production.
The demand for high-quality organically grown cannabis continues to grow.
This is very similar to the modern trends we see on grocery store shelves. Both producers and consumers see the value of whole products. After decades of using highly recycled rates, suppliers and end users benefit from higher quality ingredients. Consumers want to know what’s in the products they put in their bodies. When it comes to cannabis, they want to know that what they are taking to relieve their anxiety does not contain any harmful chemicals. This demand has the potential to further increase sales.
And when the dam finally breaks and companies can ship cannabis from state to state, the idea is that farmers will be in a good geographical position to become suppliers of high-quality organic cannabis to every state east of the Mississippi.
Cannabis companies in states like Colorado have spent the last decade preparing for the coming boom, but that doesn’t mean it’s too late to join in. The growth of the East Coast market is similar to what Colorado and the rest of the Pacific went through in the early 1980s – the potential to become a very real industry with tremendous growth and profitability opportunities. Start now!
The East Coast cannabis market, and in fact the entire U.S. market, also faces another game changer: following in the footsteps of other markets and realizing that, sooner or later, high-quality, organically grown cannabis is the next level of the game. Few investors and entrepreneurs realize this now, but the savvy businessman can take advantage of both of these trends now and position himself and his company for huge profits in the very near future. The growth of the cannabis market on the East Coast makes this a very real possibility.