Examining the Cannabis Industry After Covid
The Covid pandemic has resulted in some major changes to the cannabis industry. When the pandemic began, things were looking quite bleak for many major marijuana stocks. This includes companies like Aphria Inc. (NYSE:APHA), Aurora Cannabis Inc. (NYSE:ACB) and Innovative Industrial Properties Inc. (NYSE:IIPR). But, soon after things began to calm down, leading to less volatility in the stock market and the cannabis industry. As March approached, marijuana stocks quickly began to see bullish sentiment once more. In the period from March until late September, many leading pot stocks like GW Pharmaceuticals Inc. (NASDAQ:GWPH) and Valens Corp. (OTC:VLNCF) saw major gains.
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These gains, which range from 40% to 130% at the high end, have helped to bring in more bullish sentiment to cannabis stocks than in many months prior. In addition, the Covid pandemic has highlighted the distinct need for marijuana in America. Many states that have legal cannabis have deemed marijuana essential during the pandemic. The hopes are that this will reflect into the federal government, showing the desire for new laws to go into place. With Covid still running rampant around the world, let’s take a close look at what a post-coronavirus cannabis industry could look like.
2020 Was a Great Year for Marijuana Stocks
Although as stated before, the year got off to a rough start, things have been relatively good for the cannabis industry. A report showed that in 2019, cannabis sales had shot up by around 40%. This has helped to usher in a large amount of demand in the 2020 year. A recent study done known as the State of the Cannabis Industry showed that after the pandemic, demand should stay strong for marijuana. In Michigan, the study showed that the state could pass $3 billion in sales within the next three years. As a whole country, the study illustrated that there could be more than $35 billion in yearly sales within the next five years.
And while many think that this growth is only occurring on the recreational side of the cannabis industry, the medicinal marijuana industry is growing substantially as well. In August of this year, the amount of medicinal marijuana patients passed 3 million for the first time in the industry’s history. As we head toward the end of the year, the election will also be a major factor in what happens in the next few years. Because of this, it’s hard to make any specific predictions about a post-covid cannabis industry.
Some Marijuana Stocks Have Done Better Than Others This Year
As the pandemic rolls on, we see that there are some cannabis companies and major marijuana stocks that have done better than others. This includes companies that have included special adaptations to the Covid-related cannabis industry. While some have simply waited for the pandemic to pass, others have developed by adding order ahead and delivery options for consumers. Since the pandemic began, dispensaries that have adapted well have reported more than a 20% increase in sales over those who hadn’t.
In addition, the pandemic has helped growth in both established and new cannabis industries around the country. For both industries, the increased demand for cannabis has helped push growth estimates to higher than anyone thought possible. In California and Colorado; two of the largest cannabis industries in the country, sales are well beyond the expectations that were set at the end of last year. Because of this, many investors think that the cannabis industry could continue to grow substantially into the new year.
Is the Cannabis Industry Covid-Proof?
In the past few months, we have seen that there is an immense amount of resiliency in the cannabis industry. The report mentioned above showed that almost 80% of dispensaries quickly began to offer alternative methods for consumers to purchase cannabis. This includes curbside pick up and more. Alex Feldman, a writer for a popular cannabis journal stated that “2020 will be remembered as one of the most tumultuous years of our lifetime, but also as a pivotal year for the cannabis industry. This year, we faced some of our biggest challenges yet, and the industry is emerging stronger and more nimble.” 
In addition, many cannabis companies have had to act quickly to retain customers. This includes shifting online presence as well as marketing strategies. This should help to build a larger customer base for a post-Covid world. As stated before, it will be extremely difficult to predict what happens in the next year. Right now, it seems as though there are many factors that are up in the air. For that reason, the rest of 2020 will be extremely crucial to cannabis industry growth. With that in mind, investors should remember to stay up to date on all the happenings of pot stocks and the industry at large.
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