While the coronavirus has been an awful and tragic time for the world, many marijuana stocks and the cannabis industry as a whole, have seen positive shifts in demand and outreach during this time. There are obviously little to no good things about the coronavirus as it has been an extremely deadly pandemic. But given the popularity of the cannabis industry, it’s worth seeing how the coronavirus will affect marijuana stocks moving forward. Many have seen the rise in demand for cannabis over the past two months and how it has related to leading pot stock prices.
But, the story of how the virus will affect future cannabis market realizations, has yet to be told. In the U.S. the legal cannabis industry has become a staple of the modern-day economy. More than eleven states have legalized marijuana for recreational use with more than three times the amount that have legalized cannabis for medicinal purposes. With government stimulus checks going out to the public, more people than ever have money to spend on cannabis, and nothing to do at home. This combination has led to a drastic increase in the number of those using cannabis in the U.S. and abroad.
What the Current State Of The Cannabis Industry and The Coronavirus
One of the major issues with the cannabis industry that marijuana stocks have had to contend with is the black market. Although people do tend to use legal cannabis if it is offered, oftentimes people go to the black market to find cheaper, and more accessible sources for their marijuana products. Legal cannabis however can at times be as much as 30% more than illegal cannabis. This is simply due to high taxes and the high price of selling cannabis in a retail environment. With around 5 million people in the country reporting themselves as unemployed, one would think that people would not have the money to spend on cannabis. But, with people spending the majority of their time at home due to widespread stay-at-home orders, people are using cannabis more than ever.
A large amount of this demand increase has come from the increase in finances that people have in relation to government stimulus checks. Although this money should mostly be used to pay rent and buy necessities, cannabis is considered to be an essential service in many states. It is very clear that like alcohol, cannabis is untamed by recessions. But, the nature of this pandemic has meant that businesses have had to do the majority of their sales online or via pick-up services. According to a recent study, in mid-march, the sales from cannabis as compared to the average were up by as much as 85%. While much of this rise is due to people stocking up for the foreseeable future, it is clear that cannabis is very essential to many people’s daily lives.
What Will Change in the Near Future for the Cannabis Industry?
With so many marijuana stocks and the cannabis industry as a whole working to stay afloat, it seems as though demand could continue to increase. People are still being required to stay at home for the most part, which means that people will still be using cannabis on a regular basis. But, it also comes down to how much supply of marijuana there is and whether or not leading marijuana stocks and cannabis companies can keep up. So far, many of these companies have made the successful transition to digital ordering and curbside pick up, but how long will this be kept up? For now, it appears as though the cannabis industry is in good shape.
But, like anything regarding this virus, it is difficult to predict what will happen next month or even next week. As investors, all we can do is watch leading cannabis stock prices and wait for more news to come out. With the information in our pockets, making an educated decision about the future of the cannabis market can be much easier than previously thought.
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