That was the Seed Investor’s reaction to a recent infographic put together by the Visual Capitalist.
This infographic combines several charts featuring the strongest and most important growth trends in the cannabis industry.
You can see the full cannabis infographic here.
It breaks down the long-term future of the cannabis industry’s biggest growth opportunities.
But for right now I want to focus on the three most urgent parts of the infographic.
Because if you follow these trends, you have some big gains ahead of you.
Future Of Cannabis Chart #1:
Surging Growth Ahead For Key Cannabis Products
The Seed Investor has long said the future of cannabis will not be smoking it.
Now that prediction is becoming more prescient than ever as one of the biggest and most important trends in cannabis takes off.
Investors better take note of this change now too.
The chart below shows exactly why.
Notice how the “flower” market (that’s the raw cannabis that’s usually dried and smoked by users) is set to grow quite well in the years ahead.
The real growth in cannabis, however, is going to from alternative cannabis products including concentrated cannabis oil (or just “concentrates) and edibles.
Don’t get us wrong, cannabis flower is big business. And and will always be a core part of the cannabis sector.
It’s just the fastest-growing sectors are concentrates and edibles.
In fact, these alternative cannabis products are primed to grow up to twice as fast as flower sales in the years ahead and will eclipse flower as the primary cannabis products in the market.
But to make money on these trends, you’ve got to look at some other factors too.
The original infographic addresses these additional cannabis investment factors and we’ve cut out the key chart and will go over it now.
Future Of Cannabis Chart #2:
Compound Growth, Compound Returns
The biggest winners in cannabis stock history have been ideally positioned at every turn.
The first five states kicked off the U.S. legalization wave in 2016 and sent all U.S. cannabis stocks soaring.
Then came Canada. The Canadian cannabis market added tens of billions of dollars in value as the country marched towards complete legalization.
Now we’re entering the next round of major growth as shown above in few extract-based products including concentrats and edibles like we pointed out above.
But the real key about the surging growth of these cannabis products is the rate of growth.
After all, it's the rate of growth that really attracts investor interest and, as a result, drives share prices higher.
This chart below breaks down the rates of growth inthin the industry into Compound Annual Growth Rates (CAGR).
As you can see, the biggest growth rates will be in edibles and concentrates.
So if you’re looking for the best cannabis stocks, those that focus on those cannabis niches.
Rates of growth are a big part of the equation, but only part.
The other part of the equation is below.
Future Of Cannabis Chart #3:
Rise Of Branded Products, A Colorado Case Study
The final key part in the future of cannabis industry is about branded products.
Most cannabis consumers were merely happy to be able to enjoy the benefits of cannabis legally and weren’t too focused on quality and which brands they liked.
As the industry matures, consumers’ attitudes towards product brands does too.
We can see how important branding is becoming in the sales data from Colorado, which is one of the most mature legal cannabis markets in North America.
The chart below shows how cannabis brands are making up a rising share of the cannabis sector:
The trend is clear – brands are on the rise.
Eventually, branded cannabis products dominate the entire cannabis sector like they do most every other sector.
Also, just like every other consumer sector, the revenues and earnings will follow the premium brands too.
Cannabis Investing In 2019 And Beyond:
Put The Wind At Your Back
The cannabis sector has had a lot of ups and downs over the years.
Over the long run, the overall trend is up and all cananbis investors have done well.
But the best cannabis investors drill down into the details below the headline numbers and focus on what consumers are really buying.
In this case we can see they’re spending more and more on branded, concentrates and extract-infused products.
If you want to invest in the fastest growing cannabis companies with the brightest futures, you’ll watch these trends closely too.
