News flash from national marijuana “holiday” 4/20: Senate majority leader Chuck Schumer has pledged to “work like hell” to advance federal marijuana legalization.
“Look, Congress has a lot of work to do to catch up with the rest of the country,” Schumer said in a 4/20 event in the Capitol Building. “Congress is behind the rest of the country on this issue.”
And it’s likely to remain there, given that Congress can’t even agree that legal marijuana sellers should have access to the same financial services—checking accounts, loans, credit and debit cards—as other retailers.
Due to Republican opposition, the proposed Secure and Fair Enforcement Banking Act (SAFE) Banking Act remains on the road to nowhere.
One bright spot is that major financial players have stepped up to lobby for SAFE—including, most recently, American Express and Rhode Island-based Citizens Financial Group, which does business as Citizens Bank, as reported by Cannabis Wire.
Meanwhile, federal legalization, which would remove marijuana from the list of controlled substances, remains a non-starter.
“We do not see how this could become law in this Congress given the partisan divides, opposition from key House Republicans and differences within the cannabis sector over whether there should be interstate commerce for cannabis,” TD Cowen analyst Jaret Seiberg wrote in a recent report.
All of which explains why the number of corporate mergers and acquisitions of marijuana-related entities has plunged in recent years.
According to stats from Viridian Capital Advisors published by New Frontier Data, M&A deals in North America topped $17 billion in 2021 before plunging to just over $4 billion last year.
New Frontier attributed the wane in enthusiasm to “a combination of economic headwinds and dampened expectations for federal action.”
On the consumer side, marijuana concentrates—whose THC levels can range from 40% to over 90% compared to around 20% for traditional high-grade marijuana—continue to grow in popularity while fueling the growth of brands like Puffco and Terp Pen.
Marijuana users were roughly 20% more likely to report using concentrates last year than in 2021, many of them “dabbing” them at different times of the day, according to Brightfield Group.
“Like there are different occasions for different types of alcohol, consumers will find the occasions in their life that best fit for dabbing concentrates versus smoking flower,” Brightfield Group noted in a 2022 marijuana overview.
Another contributing factor to the growth of concentrates is the overabundance of legal and illicit marijuana nationwide—a factor that has reduced prices dramatically over the past three years.
“Concentrates have been one of the more expensive product types due to the large dose of milligrams per pack and additional processing needed. But price compression in some states has pushed concentrate prices as low as flower prices in others,” said Brightfield Group.
Millennials remain the number one marijuana consumer, capturing nearly half of every dollar spent on cannabis across North America, based on data collected in eight states by Headset.
Collectively, millennial and Generation Z consumers account for 63% of U.S. sales.
This is reflected in the rise in interest of celebrity brands.
When Miami-based Share Creative agency analyzed search activity over the last five years for Khalifa Kush—owned by rapper Wiz Khalifa—versus early marijuana enthusiast Willie Nelson's ’s Willie’s Reserve brand, it saw “significantly more search interest in Khalifa Kush.
According to Share Creative, “This could be attributed to Wiz’s more timely relevance and contributions to popular culture.”