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How will Cannabis legalization effect the retail hydroponics market?

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Courtesy of P.L. Light Systems Inc.

It’s no secret that there has been a massive Cannabis Boom in North America over the past several months with cannabis legalization looming in Canada and several states in the U.S. becoming legal. Investors continue to pour money into the industry. Even Snoop Dog is taking a break from his rap gig to get in on the action with celebrity endorsements and a new line of ganja. All of this activity leads me to ask the question, how will this industry growth affect the retail market for hydroponics products and when will these retailers really start to feel the impact?

Blog | How will Cannabis legalization effect the retail hydroponics market?

Cautious growth

The way I see it there are two main factors that need to be considered. The first being how realistic legalization is in Canada and the United States. The second is how legalization will actually change the marketplace.

In the U.S. cannabis legalization has been on a tear through many of the states most notably California. This would imply that there is going to be huge opportunity in this market in the near future. However, it is only legal at the state level and not federally. It also doesn’t look like it will become legal federally for quite some time with Jeff Sessions as attorney general. Also, the current political landscape being the way it is. So for now the opportunity in the U.S. is definitely suppressed and retailers for hydroponics products will see slow and cautious growth as people are very uncertain as to what the rules really are in their state.

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Grow substantially

In Canada the situation is significantly different with the liberal government claiming that they will push legalization by mid 2018. It is obviously not this cut-and-dried (no pun intended) and there are plenty of crucial details that still need to be worked out. It does seem, however, that legalization in Canada is just around the corner. Every stakeholder in this industry is gearing up to dive in head first and supply what seems to be a large market.

Retailers of hydroponics products are one such stakeholder that stands to see some large growth once legalization hits. As it is understood that every household can legally grow 4 plants and these people will need equipment in order to do so. Personally, I don’t believe that everyone and their grandma will be growing their own cannabis once it is legal. I do believe that there will be a niche market of hobby growers. Ones that enjoy growing their own cannabis similar to people who brew their own beer. For retailers, this can represent quite a nice growth opportunity. Their customer base will no doubt grow substantially as this new market opens up.

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