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The cannabis industry has become a topic of interest due to its potential for growth and profitability. Despite this, recent reports show that the industry is currently experiencing a declining trend. In this article, we will explore the root causes of this decline and discuss potential solutions.

In addition to reading, you can watch this blog about The Declining Trend in the Cannabis Industry too!

The Slow Growth of the Cannabis Industry

Although several states have legalized the cannabis industry, it has struggled to break into the mainstream market. According to a report by Grand View Research, Inc., the global legal marijuana market size was valued at USD 6.3 billion in 2020 and is expected to expand at a compound annual growth rate (CAGR) of 25.4% from 2023 to 2030. One of the major barriers to entry for the cannabis industry is the banking restrictions and taxation issues it faces. Although some states have legalized marijuana, the federal government still considers it illegal. Hence banks are hesitant to work with them due to the risk of prosecution from federal authorities. This has made it difficult for businesses in the industry to secure financing.

Image source: Grand View Research

The Legal Battle Between the Cannabis Industry and the Government

The legal battle between the cannabis industry and the government is ongoing. The government has attempted to shut down businesses in states where marijuana has been legalized. But they have been unsuccessful due to a lack of resources and support from other politicians.

A report by the National Cannabis Industry Association shows that the industry created over 321,000 full-time jobs in the US in 2020, despite being illegal under federal law. This highlights the potential for growth in the industry.

However, the lack of a cohesive federal policy for cannabis underscores the need for clearer regulations and guidelines. This could help ensure the long-term sustainability of the industry and its continued growth.

Image Source: Wikipedia


The Small Size of the Cannabis Industry

New Frontier Data’s report projects that the legal marijuana market in the US will reach USD 35.1 billion by 2025. This indicates that the cannabis industry is still relatively small when compared to other sectors.  On the other hand, Deloitte’s report suggests that the global pharmaceutical industry may reach USD 1.5 trillion by 2025, indicating a significant gap between the two industries.

The Need for an Overarching Federal Policy for Cannabis

The creation of an overarching federal policy for cannabis would be integral to the industry’s future success. Having a clear framework for the industry is crucial for promoting growth and innovation among all businesses and consumers. This would ensure that everyone is operating under the same rules and regulations. The Brookings Institution’s report highlights that a federal policy for cannabis would also help to address social justice issues related to drug policy. These include mass incarceration and racial disparities in drug arrests.

The Current State of the Cannabis Industry and the Economic Turmoil

The cannabis industry is currently experiencing a declining trend, with growth rates lower than expected. BDSA’s report indicates that the global cannabis market growth for 2021 is expected to be 25%, which is lower than the previous estimate of 38%. Several factors have contributed to this, including banking restrictions and taxation issues, legal disputes between the industry and the government, and the industry’s small size. However, with more states legalizing the use of marijuana, there is still hope for the industry’s growth potential. Companies like ATG Pharma are working to overcome these challenges and drive innovation in the cannabis industry.

Potential Solutions for Cannabis Industry Manufacturers

  1. Diversify Products: Manufacturers can diversify their product lines beyond just marijuana buds or edibles. They can consider developing products that use cannabis extracts such as oils, tinctures, and topicals. This can help expand the market and attract new consumers who may not be interested in traditional cannabis products.
  2. Improve Quality: One way to stand out in a crowded market is by producing high-quality products. Manufacturers can invest in better-growing practices, better packaging, and better testing procedures to ensure consistent quality. It is also important to have cannabis quality management software in place to make sure you are following all the right practices and do not deviate from government regulations.
  3. Process Optimization: Try to optimize your processes. There are a lot of systems that can reduce your workload and improve efficiency through automation. For e.g., companies like ATG Pharma can automate the filling, packaging, and labeling of finished products with RoboCAP.
  4. Educate the Public: There is still a lot of misinformation and stigma surrounding cannabis. Manufacturers can help combat this by educating the public about the benefits of cannabis and how to use it safely and responsibly. This can be done through advertising campaigns, educational materials, and community outreach programs.
  5. Advocate for Change: Manufacturers can advocate for changes to federal law to remove banking restrictions and taxation issues that are currently hindering the industry’s growth. They can also support efforts to promote social justice and equity in drug policy.
  6. Focus on Research and Development: The cannabis industry is still in its early stages, and there is a lot of potential for innovation. Manufacturers can invest in R&D to develop new products, new delivery methods, and new strains that appeal to a wider audience.


The cannabis industry can be a significant contributor to the global economy and society. Despite facing challenges like banking restrictions, legal battles, and small market size, it has created numerous jobs and shown promising results in medical research. As we move forward, it is essential to focus on the industry’s potential and promote responsible use, investment in research, and smart regulations to ensure its promise as a driver of economic growth, medical innovation, and social progress. With more states legalizing the use of marijuana, there is still tremendous growth potential for the industry.

Moving forward, we should focus on the potential of the cannabis industry and its positive impact on individuals and society. To achieve this, we need to promote responsible use, invest in research, and implement smart regulations. These measures will help ensure that the cannabis industry fulfills its promise as a driver of economic growth, medical innovation, and social progress.