As a wide range of American economy sectors ground to a halt in response to the coronavirus crisis, one particular industry headed in the other direction. Across the United States during the week of March 16, cannabis dispensaries saw their sales soar by double digits. One company dealt with hour-long lines at its Pennsylvania stores.
The cannabis industry is expanding rapidly, with the U.S. market expected to reach nearly $30 billion by 2025. But as any weed entrepreneur knows, this nascent marketplace is fraught with challenges: businesses struggle to obtain bank accounts and insurance, costly regulations cut into profit margins, and most traditional marketing channels are off-limits.
Back in March, I’d discussed the prospects for cannabis stocks, as Canada veered towards a certain contraction. This was a topic I’d explored in past articles as the cannabis sector had garnered huge interest among investors. The alcohol sector has proven resilient in the face of economic turbulence in past cycles, so there was hope that cannabis’ position as an intoxicate could also make it a worthy target.
The state Department of Health Services is putting the safety of medical marijuana doctors and patients in jeopardy, advocates say, by failing to waive certain rules as dispensaries remain open as “essential” businesses.
During World War II, America crushed fascism by repurposing automobile factories into making fighters and bombers.
In today’s war on COVID-19, America’s $10.73 billion legal marijuana sector is rapidly redeploying assets to help fight SARS-CoV-2, with the goal of saving as many lives as possible. Legal cannabis makers have begun repurposing hash supply chains for hand sanitizer. Marijuana farmers are donating pest control gowns to desperate hospitals. And once-derided ‘pot shops’ are running food drives to keep America’s most vulnerable fed.
Investors are bullish on marijuana stocks again, and now could be the time to buy some cheap pot stocks before they take off. With the Horizons Marijuana Life Sciences ETF down more than 70% over the past year, many pot stocks are trading at their lowest levels ever. And although some have been rallying in recent days, there are still some top cannabis stocks that are trading below $5 that investors may want to add to their portfolios today.
New York Gov. Andrew Cuomo said that legalizing recreational marijuana likely won't be included in the state's budget, dealing a blow to the cannabis industry companies that have invested a significant amount of time, money, and resources preparing for the rush of the state's millions of adult consumers into the legalized market.
State-legal hemp businesses are eligible for aid under the $2.2 million coronavirus stimulus package signed by President Donald Trump last week; however, medical and recreational cannabis firms will not have access to the relief package due to federal cannabis prohibition.
Businesses are on the front lines of the COVID-19 outbreak. Employers must attempt to balance public health concerns, compliance with emergency government orders, employee safety, consumer demand, and financial reality. Many states are enacting restrictions on business activity or even forcing “non-essential” companies to close or transition to a work-from-home policy.
