As we move into 2019, we’re taking a look at a few industries that we expect will hold significant potential for both entrepreneurs and investors.
Cannabis Industry
As more U.S. states begin to legalize the medical and recreational use of marijuana, projections for legal marijuana spending by U.S. consumers have increased significantly, with worldwide spend expected to reach $57 billion by 2027. Within the cannabis industry, the demand for CBD (cannabidiol) has also seen significant growth.
CBD is a component of cannabis and hemp that may help treat a variety of physical and psychological conditions. Last summer, the FDA approved CBD-based Epidiolex for the treatment of certain seizure disorders. Some studies also support efficacy in the treatment of anxiety and inflammation, although some experts caution that additional research is needed. CBD is a non-psychotropic, meaning that it doesn’t produce a high, which could make it an appealing option for non-marijuana users. Companies have already begun incorporating CBD into personal care products such as oils and lotions, but it has also seen traction in the food and beverage sector.
As of December 2018, CBD that is derived from hemp is legal nationwide. As this product category is still in its relative infancy, we expect competition within the market will escalate quickly.
Micro-Mobility
E-scooters saw a boon this year, with Lime and Bird raking in $335 million and $300 million respectively in their most recent rounds of funding. This comes as no surprise; in many major cities, you would be hard-pressed to find a street corner that isn’t littered with discarded e-scooters.
According to the 2018 Revision of World Urbanization Prospects produced by the Population Division of the UN Department of Economic and Social Affairs, 68% of the world population is projected to live in urban areas by 2050. As more of the world population migrate into urban areas, the appeal of alternatives to congested ground transportation and mass transit seems obvious.
While 2018 may have seemed like the year of the e-scooter, we don’t expect the growth of the micro-mobility industry to slow down in 2019. With huge investments flowing into e-bike and e-scooter companies in 2018, the industry is primed for big market roll-outs and expansions in 2019.
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Cybersecurity
Gartner, a research and advisory firm, predicts that global spending on cybersecurity will reach $124 billion in 2019. In the age of widespread reliance on information technology devices and digitally-stored data, governments and large corporations are increasing their spend on cybersecurity. The U.S. government alone plans to increase its cybersecurity budget in 2019, reaching a whopping $15 billion.
Cloud security and data security, and security services like identity and access management, identity governance and administration, and data loss prevention (just to name a few), are all subsegments of the cybersecurity industry that are expected to see continued growth in the next few years.
As digital-data storage isn’t going anywhere, we expect the cybersecurity will continue to flourish and grow to meet the needs of both the private and public sectors.
AR/VR
Since 2016, the virtual reality market value has almost doubled each year. Aside from video games (think Pokémon Go, which made an impressive $1.8 billion in revenue in two years), there are many practical applications for AR/VR technology, including but not limited to, education, job training, and customer support.
As higher wireless internet speeds become more available, including 5G, and the processing power of our devices become more powerful, we expect AR/VR technology’s versatility will only grow the industry within the next couple of years.
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Personalized Nutrition
From online personal styling to custom-made personal care products like shampoo, the personalization of consumer goods has been on the rise for some time now. In recent years, genetic testing has also become massively popular, offering consumers insights into how their genes could play a role in their overall health. As focus has shifted to preventing certain conditions, consumers are becoming increasingly aware of the link between preventing certain illnesses and nutrition. Personalized nutrition is an emerging segment of this larger trend toward personalization.
Genetics play a principal role in our overall health, which means that some dietary choices may work better for some, and worse for others. Some entrepreneurs see this as a prime opportunity to help consumers make better choices based on data derived from their own genetic makeup.
With the genetic testing market valued at an estimated $9.1 billion in 2018, and an expected CAGR of 11.16% through 2023, we believe that personalized nutrition will also see gains.
Sports Betting
From 2009 to 2016, the global gambling market grew from $20 billion to more than $40 billion, with the global gross gambling yield amounting to more than $400 billion annually.
In May 2018, the U.S. Supreme Court struck down a federal law that prohibited most states from allowing sports betting, ruling in favor of state-by-state determination. As more states begin to legalize sports gambling, paired with the rise of cryptocurrency and blockchain technology, we expect the sports betting industry will grow as regulatory barriers decrease.
Conclusion
For most successful companies, hard work is a given. That said, being in the right place at the right time should never be discounted. While these are just our predictions, market indicators suggest that these industries are primed for success in the coming year.
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This material is for informational purposes only and is not intended to cover every aspect of the industries mentioned. It is not intended as a recommendation nor an offer or solicitation for the purchase or sale of any particular security. An industry’s past performance is not a guarantee or predictor of future growth.
