It might have been a sobering year for the cannabis industry with pot stocks taking a beating while Canada’s legal weed market continued its bumpy ride.
But one can argue the last year was also when cannabis reached an all-time high within the cultural zeitgeist as new products were legalized, money poured into research and high profile athletes and celebrities flocked to the weed industry.
Here is a look at eight of the biggest pot-related stories of 2019:
1. CBD beat out Queen B
This was the year that cannabidiol, better known as CBD, will be remembered for going mainstream, according to U.S.-based Brightfield Group.
The cannabis research firm said the passing of the U.S. Farm Bill at the end of 2018 propelled America’s hemp-derived CBD market to reach over US$4 billion in 2019 — more than a 560 per cent increase from the previous year.
The touted wellness compound was put in everything from ice cream to beauty products. And CBD became so popular it had more online searches than Beyoncé and veganism, according to CannabisMD.
A Gallup Poll showed one-in-seven Americans now use CBD as large retailers like Walgreens and Kroger began selling the famous cannabinoid in 2019.
Brightfield said if the U.S. Food and Drug Administration green lights CBD in food in drinks in 2020, market growth will accelerate further.
2. Pot bubble bursts, layoffs ensue
The first few months of 2019 looked good for Canadian publicly traded cannabis companies. But a series of scandals and weaker-than-
expected financial results caused the sky-high valuations to burst in the last half of the year.
At the one-year anniversary of legalization in Canada, a report showed more than $33 billion was wiped out from the market value of the top 10 largest Canadian cannabis producers. Major players like Tilray Inc. (NASDAQ: TLRY) have plummeted 75 per cent on the year, while Aurora Cannabis (TSX: ACB) is down by 60 per cent over the same time.
With investment dollars drying up there has been extra pressure on companies to stay afloat — especially those low on cash reserves.
This has led to a number of major layoffs in the sector. Quebec-based Hexo Corp. (TSX:HEXO) slashed 200 jobs in October, while California’s MedMen Enterprises Inc. (CSE: MMEN) cut 190 positions in November.
3. Cannabis black market reigns supreme
Canadians spend around $6 billion on weed each year, but only $908 million was purchased from the regulated market in the first full year of legalization, according to Statistics Canada.
The federal agency calculates that just 29 per cent of all users buy their cannabis from a legal source only.
A big reason for the underwhelming numbers: price.
StatsCan data showed a gram of weed sold at licensed retailers cost $10.23 in the third quarter of 2019. But a gram of pot from the shadow industry costs $5.59 — almost half the price as legal cannabis.
4. CannTrust’s illegal growing scandal
Plenty of scandals dogged the cannabis industry in 2019 but nothing shook the sector more than when CannTrust (TSX: TRST) revealed it was growing pot in unlicensed rooms in July.
The illegal growing revelation led to Health Canada stripping the embattled producer of its licence, the company firing its CEO, and more than a $1 billion of the firm’s market value erased. Several reports alleged CannTrust not only knew about the illicit cannabis production but ordered staff to hide the unlicensed rooms with fake walls.
Some experts even said the controversy is one of the main reasons why many investors have turned their backs from cannabis stocks in the second half of the year.
5. The vaping crisis
The vape-related health crisis first gained international attention in August after 94 separate reports surfaced of Americans being sent to hospitals with a mysterious lung illness due to vaping.
The vape crisis peaked in the following months when the number of hospitalizations jumped into the thousands with dozens even dying from the lung injuries sustained from vaping.
The mystery hasn’t been entirely solved but the U.S. Centers for Disease Control and Prevention said in December its made progress on determining the cause. The CDC reported the majority of tests from those suffering from e-cigarette, or vaping, product use-associated lung injury have come back positive for vitamin E acetate, an additive used to dilute both nicotine and cannabis vape cartridges.
The CDC also reported the majority of EVALI patients were using cannabis vape products. Several other health authorities have reported the majority of cannabis vapes were bought in the black market.
The negative news headlines associated with the vape crisis put extra pressure on cannabis stocks as several jurisdictions banned the use of vape products and sales declined in some states.
But the cannabis industry has seen the vape health scare as an opportunity to demonstrate the need for a regulated market to stamp out dangerous illegal vape products.
In total, the CDC has reported 2,561 hospitalizations and 55 deaths related to EVALI cases. However, the health agency said earlier in December the number of EVALI patients is in decline.
6. U.S. House passes two landmark cannabis bills
It wasn’t all doom and gloom for the cannabis industry in 2019. The U.S. House of Representatives made history on cannabis reform that could pave the road for federal legalization and future market opportunities in the years ahead.
In September, the House passed the first standalone cannabis bill in U.S. history with a vote of 321 to 103.
The Secure and Fair Enforcement (SAFE) Banking Act would protect banks and allow them to service pot businesses without being punished by federal regulators. But the bill faces an uphill battle when it reaches the Republican-led Senate in 2020.
A month later, the House Judiciary Committee approved a bill that would decriminalize cannabis in the U.S. at the federal level.
The Marijuana Opportunity Reinvestment and Expungement Act, or MORE, would remove cannabis from the Controlled Substances Act. But the bill also faces getting thrown out by the GOP-run Senate in the new year.
7. Multiple jurisdictions ease cannabis laws
Although a third country didn’t join Canada and Uruguay in legalizing recreational weed, plenty of progress was made around the world on cannabis reform.
Illinois became the 11th state in the U.S. to legalize pot in 2019 and the first to do so through by passing a bill entirely at the legislative level, and not through a ballot initiative. The move is expected to hold huge potential for the industry as the Lincoln State is the sixth largest state by population and it could have a snowball effect on other states. Legal recreational sales are slated to begin Jan. 1, 2020.
Across the globe, New Zealand, Brazil, Mexico and Luxembourg all made moves towards relaxing cannabis policies in 2019. A number of other U.S. states and countries are expected to legalize recreational cannabis in 2020 as stigmas around the drug continue to drop.
8. Major League Baseball lifts weed ban
Speaking of cannabis reform, Major League Baseball was the first major sports league in North America to remove weed from its list of banned substances.
The league announced this month that at the start of spring training 2020 players will be able to use cannabis marking a major shift in sentiment in the professional sporting world.
In other sporting news, the Ultimate Fighting Championship league teamed up with Aurora Cannabis in 2019 to investigate whether CBD could help treat the aches and pains of the league’s mixed martial arts athletes.