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Impact of COVID-19 on Cannabis Industry

Over the past few years, the legal marijuana industry has gone from strength to strength. There are now many adult consumers who buy marijuana for recreational purposes, as well as tons of medical marijuana patients who use cannabis to deal with all kinds of physical and mental symptoms. However, 2020 has been a tough year […]

Impact of COVID-19 on Cannabis Industry

Over the past few years, the legal marijuana industry has gone from strength to strength. There are now many adult consumers who buy marijuana for recreational purposes, as well as tons of medical marijuana patients who use cannabis to deal with all kinds of physical and mental symptoms. However, 2020 has been a tough year for businesses in general, so what’s the impact on COVID-19 on the cannabis industry?

With many states locking down for months and people losing their jobs, companies in various industries have been hit hard. What’s more, the legal cannabis industry is still relatively new and this is the first time it’s had to face an economic crisis. With that said, there have been some positives for the cannabis industry throughout the ordeal. Here are some of the interesting ways COVID-19 has impacted the cannabis industry.

Demand For Marijuana Surged When COVID-19 Hit

The COVID-19 pandemic has been a rough time for many people, as well as many businesses. Many industries, such as air travel and non-essential retail stores, suffered a huge impact from the pandemic as they were forced to shut down temporarily and people couldn’t use them as they usually would.

As for the marijuana industry, it seems to have had some benefits. Since marijuana dispensaries are considered essential businesses, marijuana sales persisted throughout lockdown. Many stores and dispensaries chose to offer home delivery as opposed to bringing people into their stores.

Statistics show that marijuana sales surged in March when states and countries began to lockdown. This suggests that the mental impact of COVID-19 also had an impact on marijuana sales. After all, medical marijuana patients were inclined to stock up on cannabis for treatment whereas recreational users would have simply wanted something to help them relax.

CBD Sales Have Also Increased

CBD Sales Have Also Increased

It’s not just marijuana stores and dispensaries that have seen an increase in sales. It turns out that the closely-related CBD industry may have also benefited from COVID-19. CBD is a non-psychoactive supplement that’s often used as a high-free alternative to cannabis. 

Hemp-based CBD products are sold legally throughout the United States and, while they’re not approved for medical use, they’re still commonly used as daily supplements. When COVID-19 lockdowns struck, many people stocked up on wellness products such as vitamins and health supplements. It seems that many people also rushed to buy CBD.

The CBD industry is particularly lucrative as there’s a huge demand for CBD products and it can be sold in many ways. Not only can CBD be found in cannabis stores and hemp stores, but even essential businesses such as grocery stores often sell CBD. What’s more, a report from Market Watch found that online sales of CBD became particularly popular during the lockdowns.

Marijuana Tourism Hotspots Have Suffered

Some states benefited from a surge in marijuana sales largely thanks to COVID-19. With many people needing the stress-reducing effects of marijuana, there was a high demand for marijuana products and dispensaries and stores were happy to oblige.

However, some states also suffered from the impact of COVID-19. Statistics from MJBizDaily found that there was an uneven impact from the crisis when comparing states. California and Washington saw sales rise whereas states such as Nevada and Colorado saw a significant drop in sales.

While there are many possible reasons for this, one of the most important to consider is that Nevada and Colorado are both major states for marijuana tourism. People often come from across the world to visit these locations and try legal marijuana for themselves while they visit.

The tourism industry has suffered severely due to the coronavirus crisis and, as such, states that rely heavily on tourism have also suffered. This has also had a knock-on effect on marijuana sales in states like Nevada and Colorado where marijuana is often sold to eager tourists.

Marijuana Stocks Have Dropped

Marijuana Stocks Have Dropped

COVID-19 has also had a major impact on stocks. Since the pandemic started, stocks from various industries have plummeted due to major uncertainty due to the virus’ effects on the economy. 

Many marijuana stocks were already struggling at the start of 2020 due to weak profit margins, but the crisis has made things worse. Even many of the most prominent marijuana companies suffered huge drops in their stock at the start of the pandemic. Although the economy is starting to pick up again, many of these stocks are still low.

While this may be unfortunate news to those who invested before coronavirus, it’s good news if you’re planning on investing soon. The COVID-19 crisis means that many stocks are valued much lower than usual, making it a good time to buy low and sell high in the long-term. If you’re thinking of investing, check out some of the best marijuana stocks to watch and buy post-coronavirus.

Marijuana Companies Can Still Bounce Back

Although the COVID-19 has hit many companies hard, the marijuana industry seems to have handled it fairly well. Sales are still high for many marijuana retailers and this also means high demand for services such as growers, delivery services, and other ancillary services in the industry.

This shows that the marijuana industry has strong staying power. Even if another lockdown comes into effect, people will likely rush to buy marijuana once again as many retailers will stay open as essential businesses.

While some companies have suffered due to the virus, marijuana companies have strong potential to bounce back. Many consumers are now out of lockdown and the economy is starting to pick up again. As such, now is a great time to double down on marketing your marijuana business. Using local SEO and getting your name out there with custom branded cannabis products is a good place to start.

Conclusion

COVID-19 has hit the economy hard and many companies have suffered as a result. With that said, there have been some pros for the marijuana industry. There’s still a huge demand for marijuana and CBD products, and marijuana companies will likely bounce back from the crisis relatively smoothly. If you need help promoting your cannabis business, visit CannabisPromotions.