Sign up for our daily briefing

Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Denver news in your inbox

Catch up on the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Des Moines news in your inbox

Catch up on the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Minneapolis-St. Paul news in your inbox

Catch up on the most important stories affecting your hometown with Axios Twin Cities

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tampa Bay news in your inbox

Catch up on the most important stories affecting your hometown with Axios Tampa Bay

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Charlotte news in your inbox

Catch up on the most important stories affecting your hometown with Axios Charlotte

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Illustration: Lazaro Gamio/Axios

The biggest unclaimed territory in the consumer discretionary universe is cannabis. Even though cannabis remains illegal under federal law, Americans spent $6 billion in 2017 on legal recreational and medical marijuana.

Why it matters: Americans may have spent a total of $50 billion on recreational cannabis last year, according to the best estimates. That leaves enormous room for the legal market to grow, even if cannabis consumption remains flat.

Early investments in growing cannabis have not necessarily paid off, with the price of "outdoor flower" plunging from about $3,000 per pound four years ago to as low as $250 per pound today, according to Drake Sutton-Shearer, the CEO of cannabis media shop Prøhbtd. Thanks to falling prices, marijuana sales in Colorado dispensaries actually fell in May 2018, compared to a year earlier.

  • The industry remains a legal minefield, with regulators involved at multiple levels from municipalities up to states and even the federal government. Opening a bank account for a cannabis business can be incredibly difficult; suing for trademark infringement in another state can be downright impossible.
  • The industry is also extremely fragmented, with more than 75,000 companies in the U.S. and Canada alone. There are zero national brands, very little brand recognition even at the state level, and dozens if not hundreds of competing retailers and distributors in every jurisdiction.
  • Many of the most successful entrepreneurs are working in ancillary areas, like vape-pen manufacturing, brand-consultancy services or conference organizing. (There were 172 business-to-business cannabis conferences last year.)

A lot of people, including stock-market speculators, assume that a legalized and branded future awaits, just as with coffee, alcohol, tobacco and pharmaceuticals. But even if that's true, no one has a clue who the ultimate winners might be. (Remember that Juul came from nowhere to dominate the tobacco vape space.)

  • As a psychoactive substance, the effects of marijuana can vary wildly, and consistency of experience is much more important for cannabis brands than it is for, say, alcohol brands. It's also much more difficult to ensure, across states and geographies.

The bottom line: Hundreds of billions of dollars are currently spent on alcohol, tobacco, opioids and pharmaceuticals that treat pain or stress. Legal cannabis could, theoretically, capture a significant part of that market. But picking winners is hard. And full legalization is hardly a foregone conclusion. Expect extremely strong opposition before that happens.

Go deeper

Ben Geman, author of Generate
1 hour ago - Politics & Policy

The beginning of the beginning for Biden's climate push

Illustration: Annelise Capossela/Axios

Joe Biden's inauguration and the days right after will bring a rat-tat-tat burst of climate policy moves, but keep this in mind amid the splashy pledges: pushing through most of his agenda will be a long, uncertain slog.

Why it matters: Biden's climate plan is far more expansive than anything contemplated under President Obama. But for all the immediate pledges, it will take years to see how far Biden gets.

Dion Rabouin, author of Markets
2 hours ago - Economy & Business

Biden's inflation danger

Illustration: Sarah Grillo/Axios

President-elect Joe Biden's $1.9 trillion stimulus proposal has economists and bullish market analysts revising their U.S. growth expectations higher, predicting a reflation of the economy in 2021 and possibly more booming returns for risk assets.

Yes, but: Others are warning that what's expected to be reflation could actually show up as inflation, a much less welcome phenomenon.

Ina Fried, author of Login
4 hours ago - Technology

CES was largely irrelevant this year

Illustration: Sarah Grillo/Axios

Forced online by the pandemic and overshadowed by the attack on the Capitol, the 2021 edition of CES was mostly an afterthought as media's attention focused elsewhere.

Why it matters: The consumer electronics trade show is the cornerstone event for the Consumer Technology Association and Las Vegas has been the traditional early-January gathering place for the tech industry.