On Pointe – Wealth Management Edition
Emerging Industry Growth… Think AI but some others you may not have thought of.
Here at Alpha Pointe Capital, we love Emerging Industries for a lot of reasons. But mainly it’s the innovations that keep our attention. This On Pointe WM will be a little different as we share some thoughts and ideas regarding Emerging Industry growth.
In recent years, several industries have experienced remarkable growth. A few have emerged as significant players in the global market. Among these, the artificial intelligence (AI) and cannabis industries have showcased exceptional potential.
What makes these industries unique and primed for growth?
Nascent industries that are driving innovation and altering traditional markets make headlines. And AI seems to be a force in this.
AI has been expanding rapidly, revolutionizing various sectors, and driving technological advancements. According to recent research, the global AI market was valued at $39.9 billion in 2019. It’s projected to reach a staggering $190.61 billion by 2025, with a compound annual growth rate (CAGR) of 36.6%.
This rapid growth can be attributed to increasing investments in AI research. We’re seeing the development adoption by many industries… look at healthcare, finance, manufacturing, and advancements in machine learning algorithms.
AI applications range from drug discovery to patient diagnostics. By 2026, the healthcare AI market is expected to reach $31.02 billion, exhibiting a CAGR of 41.5%.
AI in finance is also on the rise, with the market estimated to reach $25.68 billion by 2027, growing at a CAGR of 23.4%. These figures illustrate the transformative potential of AI across industries.
Now for a completely different industry but most curious to us is the cannabis industry.
With most states legalizing medical and adult use programs, people have more access. Even though it’s still federally illegal!
The industry started with medical cannabis gaining traction for its potential therapeutic applications. Furthermore, the expanding legalization of recreational cannabis has led to increased consumer demand. We’re now seeing the emergence of diverse product offerings, such as edibles, oils, and beverages.
One aspect is how the industry is using tech (or Agtech) to expand and build. We are witnessing a lot of innovation in agriculture and it’s on display in this industry.
Cannabis has experienced unprecedented growth in recent years. This is driven by changing regulatory landscapes and increasing consumer acceptance. In 2020, the global legal cannabis market was valued at $20.5 billion and is projected to reach $90.4 billion by 2026, reflecting a CAGR of 28%.
The North American market has played a pivotal role in this growth. With Canada and several U.S. states legalizing recreational and medicinal cannabis.
We wonder if the growth in the industry might accelerate if this industry had access to traditional banking. Banks and financial firms fear violating laws put in place to catch the illegal movement of money. This puts pressure on financial institutions trying to service the industry.
New markets continue to open with regulations becoming more favorable. The global cannabis industry is set for large growth in the coming years.
Apart from AI and cannabis, several other industries have shown promise with immense growth potential.
Here are a few noteworthy examples…
Renewable Energy… The renewable energy industry has experienced remarkable growth. This is driven by the increasing demand for clean energy. The global renewable energy market was valued at $928.0 billion in 2020 and is projected to reach $1,512.3 billion by 2026, with a CAGR of 8.3%.
Electric Vehicles (EVs)… With a focus on sustainability and reducing carbon emissions, the EV market has gained significant traction. By 2027, the global EV market is expected to reach $802.8 billion, growing at a CAGR of 22.6%.
Virtual Reality (VR) and Augmented Reality (AR)… The VR and AR industry has witnessed substantial growth. Fueled by advancements in technology and expanding applications across gaming, healthcare, and education. The global VR and AR market is projected to reach $125.32 billion by 2026, exhibiting a CAGR of 42.9%.
The AI, cannabis, and emerging industries exemplify the rapid growth and potential of evolving markets. Significant investments, favorable regulatory environments, and increasing consumer demand, should flourish further in the future.
As technology continues to evolve and societal perspectives shift, these emerging industries offer many opportunities for innovation and economic growth.
Take care,
James S. Gibbons CPFA
Alpha Pointe Capital-Founder/Wealth Manager
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