Cannabis is no different than any other traditional crop in the market these days. From growers whether industrial or small scale growers to manufacturers, chemists, and agricultural engineers.
The cannabis industry has similar industrial traits as any other crop would have. At the onset of 2019, the cannabis industry was at a precipice of something large. Particularly, the legalization of adult marijuana use, and cannabis operators who looked forward to becoming multi-state operators.
However, everything took a sharp turn in 2020 when a deadly pathogen namely COVID-19 circled the world and crippled the world’s economy. As for the cannabis industry, the coronavirus left no stone unturned in damaging this industry too. Eventually, everything was put on the back burner for an industry that is illegal on the federal level.
However, we have to note that the cannabis industry falls into different categories. And each section of this industry faces the impact of the coronavirus in some or the other way.
In this post, we will look at the impact of the virus on the industry from various angles and also provide information on what is in store for the marijuana industry in the near future. Let’s begin.
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Two weeks ago when the impact of the virus was minimal, most reports emerged showing a surge in cannabis sales. As a result, more and more individuals started stocking up on cannabis. In fact, in a recent report, it was statistically shown that average store revenue went up from 52 percent to 130 percent.
Compared to the month of January the sales definitely spiked up and new users started ordering cannabis online. Not only this but there was a surge in the purchase of cannabis products such as beverages and edibles. The wholesale market also witnessed a surge in order sales and states like Florida saw a remarkable increase in THC products sale.
However, we cannot overlook the fact that the fear of the virus has caused people to not go outside. Due to which in some cities cannabis shops have seen less traffic.
Some stores are even trying to lure customers by offering deals and offers. Although other states in the US, for instance, California reported an increase in cannabis products sales. As cannabis is used for both medical and recreational use in this state, most people purchased and stocked marijuana in advance.
In fact, according to a CDC recommendation the medical cannabis users holding a medical marijuana card were advised to stock up on a one-month supply of marijuana. Perhaps the reason why there was a surge in cannabis sales in few cities across the US.
Marijuana Cultivation Supply Chain
The cannabis industry so far has seen a lot of changes. Among them is a huge change in supply chain distribution. Unfortunately, the cannabis industry experienced the same in the last two years and the pandemic made things even worse.
With challenges coming from overseas countries and North America, it’s only fair to conclude that the supply chain industry is currently facing several challenges.
In addition, the early months of 2020 were an indication that the supply chain for cultivators material will see a gradual decline. The reason behind this fall is quite evident as China, where coronavirus debuted, closed all factories and ports.
So, an anticipated supply of grow lights, agricultural equipment, and other vital supplies faced a 2-3 months delay. Now that the US is going through the same situation, most companies have stopped manufacturing supply chain material. Most of the working staff is under quarantine and this particular industry can only bounce back if the situation improves with time.
The federal government continues to cloud the legal state of cannabis. But U.S. cannabis CEOs are of the view that this pandemic may push federal legalization in a positive direction.
Particularly, after several states in the US deemed marijuana businesses as essential. Most cannabis dispensaries remained opened and even started taking online orders to deliver cannabis at home.
In addition, CNBC, in a recent report stated that three states Arizona, South Dakota, and New Jersey are expected to present adult-use marijuana legalization on the November ballot.
And three other states (New York, Rhode Island, and Connecticut) have bills pending that can be legalized this year. And the impact this industry has on the economy will only help push these bills through legalization.
Moreover, the impact of the cannabis industry on US states is quite magnificent. A $500 billion marijuana industry alone can help build labor, steel, jobs, and real estate. Simply put, the cannabis industry has grown in the past few years and it can help create jobs for people.
Also, investors are willing to invest in an industry that is illegal on the federal level. Businessmen know that the cannabis industry is a highbrow industry and legalization will only ease the tax burden governments have to face.
Perhaps the reason why most cannabis CEOs are saying that cannabis legalization will accelerate during this pandemic.
Interestingly, the protocol issued by the US government deems individuals to follow social distancing. Stay-at-home orders have forced people to change their purchasing habits. In fact, even the method used for buying cannabis has changed.
People no longer fittingly walk up to a cannabis dispensary. Instead, online deliveries and curbside pickups have become two major modes of cannabis purchasing.
Also, you have to note that these methods might stay here for a while. As people get more comfortable buying cannabis like this.
For consumption methods, most medical marijuana users are advised to consume cannabis in the form of tinctures, oils, tablets, and edibles. Not only this but several reports emerged advising people to switch from smoking to other consumption methods.
These guidelines came in the wake of individuals at higher risk of the virus. And people with respiratory disorders are one of them.
The most important marketing platform used by marijuana companies to market cannabis products are trade shows. Trade shows occur every year in several countries such as Europe, Canada, and the United States.
Most cannabis firms rely on these trade shows to market their products. All these marketing strategies are put in place to increase the consumer base. As we all are well aware that no trade shows will regulate until the coronavirus impact decreases. So, it is fair to say that most companies will witness a decline in marketing strategies.
All in all the product sales will also decrease and lead to a drop in sales. Also, cannabis companies who were looking forward to partnering with vital brands in order to launch new cannabis products are facing major operating losses.
As long as the coronavirus keeps countries under shut down, the impact will only be devastating. However, how companies come back after the situation normalizes will be a major thing to see.