Is the Cannabis Industry Poised to Bounce Back From COVID-19?
COVID-19 has devastated much of the U.S. and global economy. Long-standing industries that were previously thought “recession proof” are floundering, struggling to stay afloat as the pandemic continues to spread throughout the country. Despite extreme volatility, and not without its own challenges, the cannabis industry is surviving and growing.
When the nationwide state of emergency was declared in mid-March there was an immediate impact on the cannabis industry. Sales initially responded with a spike (likely when consumers were stockpiling products) what followed was a steep decline during the quarantine. Since then, the cannabis market has mostly stabilized, with reports showing a 40% increase in overall sales according to a study on the State Of The Cannabis Industry in 2020 put together by Vangst, LeafLink, and Flowhub.
Amidst uncertainty and fear that the pandemic initially brought, cannabis industry jobs also started to disappear. While most brick and mortar businesses in the U.S. shut down during the quarantine, many states declared cannabis businesses as “essential” allowing them to remain open. This designation gave the industry renewed momentum, and sales numbers supported this rebounded.
2020, even as projected by MJBizDaily’s Chris Walsh during MJBizCon last December continues to be a challenging year even before the world knew about COVID-19. With the virus and all that it implies
is still looming, the legality of cannabis is uncertain state-by-state and at a federal level with an unpredictable potential economic crisis on the horizon. There is no telling how the pandemic will impact
I would argue, that not only is the cannabis industry poised to bounce back from the initial losses as a result of these challenges, but that it could potentially be in a position of growth. Newly approved markets, like Pennsylvania and Oklahoma are booming, more than making up for declines in other states. On its current trajectory, marijuana sales are on pace to near $37 billion dollars by 2024. Medical marijuana sales in Florida and Oklahoma alone are expected to surpass $1 billion each by 2021.
Cannabis entrepreneurs are no strangers to challenges and uncertainty is the norm in the cannabis business world. With constant shifts in the legal status of cannabis and social acceptance, the industry has always had to and continues to fight for its own survival since its inception. It is this fight and vigor inherent to the industry which will serve it well during the current crisis.
While it is impossible to say what will happen with any industry in the wake of COVID-19, increasing sales numbers show that the cannabis industry is in the unique position to bounce back stronger and with greater success than before.