In recent years, the legal cannabis business has experienced an explosion in both private and public growing. But a number of challenges remain in the way of realizing its full potential, including fending off an organized black market, obtaining financial assistance from governmental agencies, navigating a worldwide pandemic, and now waddling through rising economic inflation.
The industry is focused more on the retail and production sectors, whereas there are several untapped areas with little noise and enormous potential.
Gone are the days when Americans associated cannabis with the "Reefer Madness" stigma. Now, the conversations revolve around legalizing cannabis use, sales, and possession. The majority of the adult population is much more comfortable with cannabis use than ever. They are even willing to share details about their consumption habits and source of products. Anecdotal studies show that homegrowing cannabis is a niche with sparse details. This niche could be a crucial piece of the cannabis market puzzle in a few years if explored.
Today, about 3 million residents self-cultivate cannabis at home—over $20 billion is predicted to be spent on homegrow tools and supplies before the decade's end. This growing trend draws much attention from retailers, cultivators, and operators in the system. Everyone wants to know how they can tap into this budding niche. Either by drawing the homegrowing Americans back into the dispensary fold or capitalizing on their self-cultivating efforts.
Growing cannabis at home
As mentioned earlier, 3 million Americans grow their marijuana at home. Many home growers consume cannabis for medical and therapeutic reasons. However, some categorically state that they use cannabis to improve their overall wellness. As to why cannabis homegrows are on the rise, 73.5% say they engage in this new activity for pleasure, while some do it to save cost. 33% of self-growers say they do it because they believe they can produce better cannabis products than those sold at dispensaries. While some do it because it is more convenient and less risky.
In most jurisdictions where cannabis is legal, adults are permitted to grow a certain number of plants indoors; here is where the story largely starts and stops. Home growers haven't been a segment of the market that has been largely regarded as useful over the course of the past few decades of state-level legalization; thus, the broader legal business doesn't heavily promote them or devote a lot of resources to educating them.
Current Stats Show Homegrowing Is Here To Stay
6% of America's cannabis consumer market grow their marijuana at home. This is a significant number of this population, and it's projected to rise higher before 2030.
Based on data published by New Frontier, consumers who prefer to view their cannabis at home spent over $2.5 billion on growing supplies in 2020. John Kagia, New Frontier Data Chief Knowledge officer explained that home growers spend a few dollars on setting up efficient grow systems. They purchase inputs like seeds, seedlings, and fertilizers for each cycle and tools like pots, polythene bags, and pruning shears.
Kagia added that the firm's projections for the next eight years is that the homegrown community will invest almost $30 billion on supplies alone. He stressed that the homegrown market is a lot larger than most people imagine.
According to New Frontier Data, the cannabis homegrow market is diverse. It wasn't so easy to pinpoint a certain demographic that preferred to grow at home. The data showed that home cultivators are not limited to a certain age, or socioeconomic spectrum. Homegrowers can be married, single, rich, poor, average, regular users, inconsistent users, young adults, or senior adults, they are spread proportionally across all legal states.
50% of home growers are married, with the majority having children. While 25% make at least $100k annually. 25% make $25 – $49k, and 46% earn below $50k.
The co-founder and CEO OF LEAF, Jonathan Yoni Ofir, concurred that the home grow market is big and that gathering this data was tricky. He explained that consumers weren't so eager to share their home grow experiences, despite being given the choice of sharing anonymously.
People are only just becoming willing to discuss their habits. Self-cultivation is more complex than the regular college student closet grown cannabis activities. Toni ofir stressed that it is far from it. Only that the college students used to be the only ones bold enough to talk about it.
More Details
New Frontier data shows that over 11 million pounds of dried cannabis have been produced by home growers in the last seven months alone. By 2030, the homegrow market could be producing at least 15 million pounds of dried flowers annually. Most homegrowers produce only what they can consume.
For context, only a million pounds of cured cannabis has been produced legally in Colorado this year. Meaning there are over 10x as many home growers as you might expect. That's an excellent illustration of the volume of work being produced by these hobbyists, said Kagia. With so much flower, there is an actual demand for education about consumer-driven genetics, fertilizers, ventilation, temperature management, pruning equipment, curing technologies, and storage solutions.
Why is education important?
One thing holding the homegrow market back is the lack of education and experience. Most homegrowers in this sector have less than four years experience growing cannabis plants in their homes. Less than 15% report that they have upto three years experience in this field. Everyone seems to be learning as they practice. Although the homegrow market is here to stay, participants need to have the proper education to produce better yields with the resources they have. The sooner this happens, the faster the acceleration of the community's expansion.
Bottom Line
The cannabis sector has massive deficiencies in markets like growing supplies when it comes to being able to offer marketable goods and services to hobby farmers who can spend anywhere from a few dollars to more than $1,000 per crop.
In reality, slightly less than 58% of home growers claim to spend under $200 on each crop. And more than half of home growers report buying their supplies at neighborhood hardware or garden stores, and more than half say they get their seeds from flowers they've bought. Investors should look into investing in growing supplies.
GROWING WEED AT HOME IS BIG, READ MORE...
