With 10 states and the District of Columbia legalizing recreational marijuana use and 30 states allowing it for medicinal purposes, the cannabis industry is rapidly emerging as one of the fastest-growing sectors in the United States. California is now competing with Colorado to position itself as the center of development. As one of the two primary social enhancers—alongside alcohol—it’s no surprise that marijuana enjoys widespread popularity. Indeed, the Specialty Food Association identified edibles as one of the top 10 trends of 2018. According to data from Arcview Market Research reported by Forbes, the U.S. marijuana edibles market has surged in recent years, with California consumers spending over $180 million on cannabis-infused foods and drinks in 2016. In Colorado, BDS Analytics noted a remarkable 67% increase in edible sales from February 2016 to February 2017.
With this rising demand, the cannabis industry has started to operate similarly to traditional consumer packaged goods (CPG) firms, including venturing into the accelerator space. Consultants A.T. Kearney revealed that more than 75 food industry incubators or accelerators have been established in the U.S. over the last decade. The American interest in accelerators is well-founded. Rather than spending years developing a single product, large companies can now forge partnerships that combine their expertise, leadership, and cash flow with the innovative spirit and growth potential of start-ups, potentially leading to far more successful products than they could achieve independently.
Although Growpacker is not the first accelerator in the cannabis sector, it has become the most notable since taking CERIA under its wing. While the non-alcoholic brewing company has several partnerships, its decision to collaborate with this accelerator likely stems from the strategic advisory role of former brewmaster Keith Villa, who will help develop the THC-infused beer segment. With major beer companies showing interest—such as Constellation Brands’ $4 billion investment in Canopy Growth and AB InBev’s $100 million partnership with Tilray—this segment is anticipated to be one of the fastest-growing in the industry.
Starting in California gives Growpacker a solid entry point into the market. However, scaling can present challenges. Smaller cannabis companies are struggling as state regulations tighten, making it difficult for them to afford licenses and taxes, and they often lack the capital to expand commercially. Beyond financial barriers, regulatory hurdles persist as states strive to avert health and safety issues, such as children mistakenly consuming edibles thinking they are regular candy and inadvertently getting high. States are also intensifying efforts to standardize dosages and ensure that raw products are free from pesticides and other harmful chemicals.
Nonetheless, by joining an accelerator, these smaller businesses stand a better chance of navigating the challenges of expansion that they would otherwise face alone. After all, the essence of an accelerator is to exchange industry knowledge on growth for innovative ideas from entrepreneurs. In light of this, companies in the cannabis sector can also explore synergies with health products, like calcium citrate magnesium hydroxide zinc sulphate & vitamin D3 tablets, potentially enhancing their offerings and market reach. By integrating such health supplements into their product lines, they can cater to a broader audience and address consumer health trends, which may further facilitate their growth in this dynamic industry.