Experts are reviewing how the cannabis industry could fare during the pandemic and what could global recession mean for the industry. The public response could shift towards cannabis as the pandemic continues to affect several lives. The government, for its part, has assembled protective measures so that the entire country can put a brave front against the novel coronavirus. However, when reality hits hard, it is difficult to ignore the devastating impact this virus can have on the economy.
Most businesses face temporary shutdowns, while others have been deemed essential by the government. The medical marijuana industry falls in the same category because millions of Americans consume cannabis to manage a large variety of medical conditions. It is now easier than ever to visit to see a medical card doctor virtually using telemedicine, now available in states like Oklahoma, Ohio, Missouri, and New York.
Let’s look at how the coronavirus pandemic is affecting the cannabis industry.
COVID-19 Impact on the Medical Cannabis Industry
Soon after the state authorities deemed marijuana businesses as essential, there was a sudden surge in the purchase of medical cannabis. People started stocking up on cannabis and some dispensaries witnessed an increase in cannabis sales. However, the effect of the pandemic is so strong that these numbers will not cover up for the losses that the medical cannabis industry will face until the situation simmers down. So, stocking up looks like the only option right now. And it might come as a blessing for those who require medical marijuana for their treatment.
In addition, you might have also come across news articles explaining how the marijuana industry has shown imperative improvement in cannabis sales. Particularly major US states that have deemed marijuana businesses as essential. The reason behind this surge in sales is clearly because people are stocking up on months of cannabis. On the contrary, the fear of coronavirus has caused most people to stay indoors.
Legalized states with stricter laws report a decline in cannabis sales and some dispensaries are rolling out offers in order to attract more customers. For example, in California, where cannabis laws are not sterner, people can still purchase cannabis from licensed dispensaries that have experienced significant growth in their sales.
Impact on the CBD Market
This turbulent economy is affecting the feel-good CBD market just as well. Theoretically, in times like this, we look for ways to alleviate stress and anxiety caused by the pandemonium of the coronavirus. CBD helps to reduce anxiety and provide relief from stress in a natural way. So, the sales during the pandemic must increase. Although you will be surprised to know that even though cannabis sales in some places are at an all-time high, sales are hurting in the CBD and hemp sectors.
It is believed to be due to the economic slowdown as people are hesitant to spend on CBD when their employment is uncertain. COVID-19 related lay-offs have spiked in the past few weeks including places like Philadelphia and California. The only silver lining to this is that major CBD products that were not available online are now. Visit an online CBD store and purchase your favorite CBD products and manage your condition effectively.
Another aspect where COVID-19 has affected the CBD industry is in the sector of insurance policies. Although several canna ventures have their insurance packages in place, most of these policies and packages have no provisions in place for the disruptions in business due to a pandemic like the one we are experiencing today.
Not just that, the CBD industry has experienced a drop in productivity as thousands of workers can no longer work due to the lockdown placed by the government. Owners have been forced to shut their CBD businesses till further notice and they have no insurance policies to back it up. The losses that they suffer are negatively impacting the industry on quite a large scale. All we can hope is that the situation improves, and life goes back to normal.
Effect on Supply Chain Distribution
Despite people stocking up on cannabis, there is one thing that still disrupts the peace and economy of the marijuana industry. You see, when we think of cannabis, aspects such as marijuana cultivation and processing come to our mind. But there are a lot of moving parts of the supply chain and not all of them belong to the USA. For instance, China originates most of the moving parts of the supply chain.
That is because China produces a lot of material at low cost and it is perfect for the still-nascent pot industry. Take vaporizers, for instance, most companies rely on the production of vaporizers from China. This means that it can be an issue for cannabis companies that generate profit by selling vaporizers.
KushCo is a major supplier of vaporizers and packaging material and most of it originates from China. So, given the situation, we face currently it is safe to say that KushCo may not see healthy sales. Not only this, the supply chain distribution is slammed in the CBD market as well. With several countries under lockdown and travel restrictions under place, the CBD industry like any other business is under an axe.
Even though experts are advising canna-users to grow their own marijuana in order to curb the spread of the virus. Here is what some of them are missing. Companies selling these items are not essential and most canna-users will have to depend on natural light in order to grow marijuana.
This also means that companies that sell LED bulbs that are considerably cheaper are facing disruption and temporary halts. So, growing marijuana is also not an easier way out.
Impact on the Consumption Patterns
With the rise in continuous advisories published by health care experts in order to reduce the risks of coronavirus, people are becoming more cautious. Consumption patterns are shifting. Smoking cannabis joints or vaping the bud are the most preferred forms of consumption by the American people. A valid reason behind this is that by smoking the herb one can derive the benefits immediately.
But with COVID-19 being a respiratory disease, people are looking for substitute consumption methods like edibles and CBD oils. There are several ways to consume CBD oils, and during the pandemic, even health professionals are recommending people to switch these consumption methods.
From smoking to eating edibles, people are being advised to use other cannabis consumption methods. The reason being that smoking marijuana can cause the respiratory tract to deteriorate with time. Experts through research studies are advising canna-users to stay away from smoking. This will help them strengthen their first line of defense against the coronavirus.
Travel Restrictions & Drop in Tourism
We have to consider all the aspects of COVID-19 while measuring the total effect and cause ratio. And this brings us to our next point, which is travel restrictions and lockdowns. Now, we all know that the travel restrictions have led to complete shutdowns. The tourism industry faces the same fate and it has led to weaker sales or no sales at all.
Whether you agree or not, every industry is interconnected to each other. One loose end can lead to the downfall of the other. Take the cannabis industry, for instance, you might think that marijuana businesses are deemed essential by the government. So, the cannabis industry will see a surge in sales and revenue. Indeed, some dispensaries have seen a rise in sales, but the cannabis industry is vast.
It has roots in cultivation, processing, manufacturing, and even tourism. Due to a drop in tourism, cannabis dispensary complexes that used to have event centers, bistros, and consumer-facing processing centers have been hit hard.
A cannabis dispensary complex in Las Vegas, Planet 13 holdings with immense stores for cannabis activities will not see any major sales as tourist footfall declines. In other words, most dispensary complexes will now face huge losses until lockdowns and shutdowns continue.
The Covid-19 coronavirus has affected the cannabis industry in a multiple of ways. In addition to the serious implications on people’s health, the pandemic has significantly affected millions of businesses across the world connected to cannabis. This means that most businesses despite being deemed essential are suffering losses in some form or another.
More vitally, accommodating telemedicine applications to minimize the risk of the virus touts the sustainable nature of the cannabis industry. It is indeed very safe to see a doctor online from the comfort of your home and get a medical cannabis recommendation in just a few minutes. These practices can significantly help medical professionals flatten the COVID-19 curve. All in all, these protective measures will help us form a strong line of defense against the COVID-19 impact.