October 3, 2020 | technology | No Comments
If two markets are pretty much guaranteed to make money over the next decade separately it’s artificial intelligence and cannabis. Together, the pair could form a perfect storm thanks to COVID-19 driving demand. Cannabis is more popular than ever thanks to lockdowns and vape technology and the market is predicted to be worth $76.3 billion by 2027). A.I. adds new business benefits for the industry that the COVID boom could mean big changes ahead for regulation.
Adrian Holguin, CEO of CannaShark Consulting, started consulting for cannabis companies in 2017, and in three years he says the changes have been dramatic. Previously a Silicon Valley alum working in intellectual property and patents and trademark work, Holguin, now works with entrepreneurs and startups entering the cannabis industry and is bullish on the impact that AI is having: “The use of A.I. sensors allows us to keep track of every element of the cultivation process such as water level, P.H. level, temperature, nutrient feed, etc. A.I. will also help in a lot of the automation process. Indoor growing has a history of heavy resource consumption for water and electricity, Artificial Intelligence and robotics allow the cultivating process to be more efficient and effective.”
Holguin, believes the future of the pairing will help not only with environmental controls and quality control but A.I. also offers more business operations benefits; “A.I. can help with cost-benefit analyses of purchasing manufacturing equipment or analyzing risks before implementing new techniques into the grow-process. If the use of A.I. in cannabis continues to go down the same path as big agriculture, it will ultimately help to reduce the costs of labor.”
Big issues face the cannabis industry from different fronts. Legally, cannabis continues to see roadblocks, regulation changes, and challenges from across the political divide. For example, CBD, THC, and CBN are all given different National Institute on Drug Abuse classifications even though they come from the same plant. There are more than just regulatory issues for cannabis. One of the most unmentioned surrounds banking, many institutions simply don’t want cannabis companies as clients. The same comes with A.I. startups, thanks to the big guns scooping them all up (Google, Facebook etc). A brain drain is happening at a cost to fill 10,000 AI-related jobs budgeted more than $650 million for salaries. Some forecasts in Canada have been downgraded.
COVID-19 may change this but banking and societal views remain big barriers for scaling businesses. Research and testing also remain an issue for the industry although this is a key area that AI can assist in. As does, state voting; Vivien Azer, Managing Director, Cannabis; Consumer – Beverages, Tobacco for Cowen believes that if New Jersey voters choose to legalize the drug, it could cause a domino effect in neighboring states like New York, Pennsylvania, and others to adopt similar standards.
The biggest issue may not be these issues though. getting talent might be. Big tech companies have been actively hoovering AI startups, not just to acquire technology or clients but to secure qualified talent. The pool of true experts in the field is small, and Alibaba, Amazon, Facebook, Google, and other tech giants have hired most of the available talent. Companies have adopted M&A as a way to sign up top talent, a practice known as “acqui-hiring,” for sums that typically work out to $5 million to $10 million per person, according to a recent A.I. report by McKinsey.