In 2019, legal cannabis sales jumped 32% since 2018, Illinois became the first state to legalize cannabis via legislation and the U.S. House of Representatives passed the SAFE Banking Act, a first step toward opening banking services for the industry.

Of course, the news wasn’t all rosy. Stock prices fluctuated and a cash crunch hampered growth and expansion. New York and New Jersey failed to lift prohibition. But these can be viewed as growing pains for an emerging industry. As we head into 2020, here’s a look at what’s ahead for the industry.

2020 Election

Now that two-thirds of Americans favor a complete end to prohibition and 90% support medical cannabis, politicians are getting on board, too. Only three major presidential candidates (Donald Trump, Joe Biden and Michael Bloomberg) oppose full legalization at the federal level, although all three do appear to support a states-rights approach to cannabis regulation. Cannabis is an issue that drives voters to the polls, so depending on how many states have legalization referendums on the ballot next year, cannabis voters could play a big role in 2020. Which brings us to our next topic.

State Legalization

In the absence of federal legislation, individual states continue to work to lift prohibition. Arizona, Florida, Missouri, New Jersey and North and South Dakotas likely will add adult use referendums to their 2020 ballots. Additionally, five northeastern states forged a broad agreement in October to work together to legalize adult use cannabis, with the big push happening next year. Governors from Connecticut, Rhode Island, New Jersey, New York and Pennsylvania agreed to set a similar tax rate on cannabis sales, limit the number of cannabis licenses, prioritize the inclusion of small business owners, reform the criminal justice system and develop joint policies for policing the industry. Meanwhile, Mississippi, Nebraska and South Carolina likely will approve medical use.

Institutional Investors

Will 2020 be the year institutional investors bet big on the cannabis industry? That depends on the progress made on Capitol Hill toward lifting prohibition at the federal level. Most big institutions are waiting for more favorable laws before investing in U.S. cannabis. If there is real progress in Washington and investors see a potential legalization date — even if that date is 2021 — money will start flowing into the space. And once cannabis is descheduled, the industry could be flooded with cash.

Cash Crunch

Funding should loosen up next year as the industry cycles out of its current cash crunch, where cash on hand and quick access to capital is top of mind. Smaller, weaker players will fall by the wayside. But healthier companies will focus investments on accretive acquisitions and building a footprint to have the quickest impact on P&L, getting them to sustained profitability as quickly as possible. That way, they don’t have to depend on capital markets to raise cash. Once investors have more clarity on just who are the winners and losers, they will start making smart bets on those winners. In the meantime, it is a game of survival.

Stackable Dosing

The coming year will bring more of an emphasis on stacked dosing products in the form of mints, tablets and sublingual sprays to bring in new consumers, 55% of whom are interested in edible products. These new products will deliver 2-3 milligram doses, instead of the more traditional 5-10 milligram dose. These options give consumers an easy way to layer or “stack” their doses, so they can get as little or as much of an experience as they want. Plus, they’re easy to use and offer immediate effects. We’ll see more products with those fast onsets, especially as beverages become more available.

Whatever else happens in 2020, the cannabis market will diversify as more new consumers enter the space, and it will continue growing. In fact, it’s expected to outpace this year’s sales of $13.6 billion by a full 25%. As cannabis continues to gain mainstream acceptance and attract new consumers, the industry has many reasons to be optimistic about the coming year.