5 Predictions for the Global Cannabinoid Market in 2021 – Cannabis Business Executive

by Dennis O’Neill

2020 has been a transformative year for the cannabis industry. A new presidential administration, several states legalizing cannabis, the passage of the MORE Act in the House, and breakthroughs in biosynthesizing rare cannabinoids were just a few major milestones in a turbulent year.

As we begin a new year, what developments can we expect for the cannabis industry—particularly the global cannabinoid market?

1. This will be the year of CBG

There are studies showing that the rare cannabinoid CBG, like CBD, has anti-inflammatory, anti-anxiety and anti-bacterial properties. A few studies have shown CBG to exhibit anti-tumor properties on cancer cells. And it may be a novel treatment for glaucoma (by reducing intraocular pressure).

We will see more and more pharmaceutical companies go into clinical trials using CBG, validating its health benefits. The prices for CBG have come down, which makes it more cost-efficient to add into new products.

We are expecting over a 100% increase in CBG demand from 2020 to 2021, and this explosive growth will continue for the next five years. CBG will be the first rare cannabinoid of many that will make it into the mainstream economy.

2. Investment in cannabinoid companies to surge

We expect a surge of new capital flowing into the cannabis sector, especially the cannabinoid market, starting in 2021.

There is a significant increase in demand for all cannabinoid products across the board—including CBD, THC, CBG and THCV—from recreational users, consumer packaged goods and pharmaceutical companies. A significant increase in demand is always followed by major investment.

The companies that will revolutionize this market are ones with the highest quality and lowest prices, which means that biosynthetic cannabinoid companies will be the leaders in investment and capturing market share. We will also see a major consolidation in this market amongst the grow, harvest and extraction companies, increasing efficiencies and driving down costs.

3. Biosynthesis of rare cannabinoids will break through

There are dozens of companies developing technologies for biosynthesizing cannabinoids such as CBG, THCV, CBN and THCA. Their goal is to produce higher quality and lower prices for these rare cannabinoids.

Through biosynthesis, companies can deliver significantly higher yields, which means lower costs than the traditional method of harvesting cannabinoids through plants. Biosynthesis can produce pharmaceutical-grade, bioidentical, THC-free compounds at 70-90% less cost than wholesale prices.

Whoever has the highest quality and lowest prices will own the majority of the biosynthesis market, which is projected to be $10 billion by 2025.

4. The regulations domino effect

The Biden-Harris White House will certainly be friendlier to cannabis than the Trump administration. And the Marijuana Opportunity Reinvestment and Expungement Act (MORE Act), which was passed by the House in early December, will open the doors to fewer regulations if it can clear the Senate. More and more states are lifting regulations, so we believe it’s a matter of time until cannabis becomes federally legal.

The regulations and potential conflicts between state and federal regulations have kept many investors and large brands out of the market. But now, the walls of regulations are coming down at both the federal and state levels, opening up these markets for major expansion. This will attract the larger investors and brands to the cannabinoid market.

5. THCV becomes the hot new cannabinoid

Early reports indicate THCV (not to be confused with THC) could contain a variety of health benefits: it may help with appetite suppression/weight loss, possibly treat diabetes as well the potential to reduce tremors and seizures caused by conditions like multiple sclerosis, Parkinson’s disease and ALS.

There has been an explosion of interest in THCV due to its potential health benefits. We are seeing major players in the nutraceutical, health food and pharmaceutical industries clamoring to add THCV to their product lines.

Companies can now produce THCV through biosynthesis, creating a pharmaceutical-grade, organic, bioidentical compound at 70-90% less than wholesale prices.

This is exactly what the largest players in the market want: a pharmaceutical-grade, consistent product at significantly less cost. The current prices and quality have limited THCV production, but new breakthroughs in biosynthesis have solved those issues, so we expect a tsunami of orders for THCV in 2021.