With the world now coming to a screeching halt with the COVID-19 pandemic, the global cannabis market is perhaps more precariously positioned than ever before.
As the S&P hits new lows and the Federal Reserve lowering interest rates, many companies, not just those in the cannabis industry, are feeling the pinch. With billions wiped off markets in a matter of moments, industry mainstay Tilray has been forced to raise $90M for “general corporate purposes”[1] to continue operations.
Potential has always been a precursor to the way many investors have looked at the global cannabis industry. While it’s lightyears away from the historic highs that bathed investors in a “green glow,” the past year has been a different story altogether. Companies such as Aurora and Canopy have seen the departure of high level executives, M&A activities have slowed, and to make matters worse, cannabis rescheduling by the World Health Organization (WHO) has been delayed until December 2020 at the earliest[2] and given the impact of COVID-19, this may be optimistic in its own right.
So the question must be asked, is the COVID-19 pandemic, actually an opportunity in disguise?
According to mjbizdaily, some Canadian stores have seen an “unprecedented” sales surge in product, in some cases, upward of twenty percent.[3]
Perhaps similarly to the idea that people need to stock up on supplies as they hunker down for the foreseeable future, in reality the cannabis industry is primed to benefit in much the same way as streaming and entertainment services are surging amidst the social distancing and quarantines of our current reality. With COVID-19 affecting the respiratory system, it makes a lot of sense to highlight the various non-inhalable forms that cannabis can be enjoyed and consumed.
When if the twenty percent surge in demand is an outliner, cannabis can be marketed to a captive audience while prioritizing the availability of edibles, beverages, and topicals on the market.
Should lawmakers and regulators look to enact “Force Majeure” on the availability of cannabis products, in so much as they can pass laws in extraordinary circumstances? Doesn’t it make sense to allow consumers to access products more readily? Afterall, this is not just be an issue of cannabis consumption, it also relates directly to jobs and tax revenue or a state or region.
Much like the championship window exists in sports, perhaps now is the opportunity for the cannabis market and associated companies to buck the downward market trends and capitalize on surging demand among consumers.
If demand is high and it is clear that a lot of people want products, maybe that underpins the position of cannabis and cannabis products in society.
Sources
[1] https://mjbizdaily.com/coronavirus-effects-on-marijuana-firms-tilray-plans-90m-raise-maine-aims-to-tackle-illicit-mj-more/
[2] https://mjbizdaily.com/expected-delay-in-vote-on-who-cannabis-scheduling-recommendations-spurs-us-official-to-express-regret-over-decision/
[3] https://mjbizdaily.com/amid-coronavirus-canadian-cannabis-stores-see-unprecedented-sales-surge/
Author
Co-Founder | Head of Innovation and Product Strategy
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