COVID-19 brought down the world on its knees. Countries are on lockdown, economies are heading south, businesses are suffering, and life is disrupted across the globe.
It’s going to be a wild year for any business, and the Cannabis industry in the U.S. is not spared. What was envisioned to be a rosy future with billions of dollars in sales forecast for years to come is now in the eye of the storm.
HOW WILL THE CANNABIS INDUSTRY COPE WITH THE PANDEMIC?
Weed sales on 16 March in California surged around 159% compared to the same day last year. On the same day sales in Washington and Colorado increased by around 100 percent and 46 percent, respectively.
People spend more money during their pandemic shopping with fewer shopping trips.
Sales from Brick-and-mortar stores fell, but there was a spike in online sales of cannabis products. Consumers have shifted their shopping preferences to online purchasing during the pandemic.
It is hard to predict the future of the cannabis industry, but there are trends that will hold from the vantage point of a pandemic.
MORE LEGAL STATES
At the start of 2020, Illinois legalized the sale of marijuana for recreational use for a total of 11 states and Washington D.C. that is fully legal and 33 legal medical cannabis states.
And the numbers are expected to grow by the end of 2020. Arizona, Arkansas, Connecticut, Montana, New Jersey, New Mexico, New York, and Vermont are bent on legalizing cannabis for recreational use. The states of Alabama, Idaho, Kentucky, Mississippi, and Virginia realize the curative effects of cannabis and are closing in on legalizing cannabis for its medicinal value. South Dakota is quite aggressive on cannabis legalization and is pursuing to fully legalize medical and recreational use of cannabis simultaneously.
Things didn’t turn out as expected for the cannabis industry, sales forecasts were not realized the demand was way below targets. The operating cost of running a business during pandemic times was too much for most companies to weather the storm. Consolidation was a solution to survive market volatility.
Ethos Cannabis with investment interests in Pennsylvania, Massachusetts, Florida, and Arizona has officially acquired 4 Front Ventures Corporation. Ethos will manage and own the three dispensaries in Baltimore and Washington D.C. areas.
Jushi Holdings, multi-state cannabis, and hemp operator closed an agreement for the acquisition of Pennsylvania Medical Solutions LLC (PAMS), a Pennsylvania grower-processor previously owned by a subsidiary of Vireo Health International, Inc.
Columbia Care Inc. has signed a definitive agreement to purchase Project Cannabis, an award-winning cannabis company based in Los Angeles, California. Project Cannabis is one of the leading cannabis cultivators, wholesalers, and retailers of highly recognized, award-winning, branded products.
In late July, Curaleaf closed an approximately $700-million deal to acquire Grassroots Cannabis. The acquisition makes Curaleaf the largest cannabis company in the world, based on its anticipated $1 billion in annual revenue.
CANNABIS CONSUMERS WILL MATURE
The coronavirus experience shows that people respond to an emergency accordingly. There were spikes in sales of edibles because of less face contact when ingesting and smoke is avoided which affects the respiratory system. Online deliveries cannot cope up with the demand. The upscale customers shifted their purchases on cheaper offerings spending their money on basics rather than indulgences.
That said, consumers will continue to be picky about their choice of cannabis products such as bongs, seeds, especially when it comes to custom rolling tray. The ordinary user will be more discriminating, they will want to know who, how, and where the product was made. Items should be organic, clean, natural, and passed the scrutiny of the Food and Drug Administration (FDA).
PATRONS WILL REQUIRE FULL DISCLOSURE FROM SEED TO SHELF.
Stay-home is here to stay until a vaccine is discovered. Consumers will keep the cash registers of online stores with deliveries busy.
With more time indoors, people will turn to cultivate their own cannabis in weed containers. This poses a challenge to cannabis companies, the creative ones will prepare quality craft strains, edibles, and topical.
STRICT LAW ENFORCEMENT
With more states moving to full legalization, enforcement of laws will be more stringent as they move past amending regulations and licenses.
Legal cannabis operators will seek the assistance of local government authorities to stop illicit operators from selling cannabis in exchange for their hefty tax payments. These malefactors who shun shifting to the regulated market will feel the heat in enforcement actions. In California, there are about 3,000 cannabis businesses operating in the black market which overshadow the legal retailers.
Likewise, legit operators will also experience the burden of the strict implementation of the laws. There will be visits from state and local enforcement teams for audits and inspections to assess the adherence to the regulations.
NEW NORMAL FOR CANNABIS USERS
COVID-19 ushered in a period of insecurity leading to a new normal for cannabis users. The cannabis community is doing its share to keep the deadly virus from spreading.
Puff, puff, and pass of bongs, joints, and vapes are a no-go. Instead, tokers are encouraged to bring their own things, COVID-19 is just a puff away waiting for an invitation.
Physical gatherings are discouraged, meet-and-greet of potheads are done through online meeting platforms such as Zoom, GoToMeeting, Skype, and Google Hangouts among others. Famous friendly festivals like Burning Man was canceled with no word when it’ll be held, Coachella was deferred to October.
The usual hugs, handshakes, and high fives were replaced by a killer smile or a friendly wave from a distance.