The Positive Impact of Covid-19 on the Cannabis Industry

The impacts of the COVID-19 pandemic were felt across several industries around the world. While some industries were significantly negatively impacted, it might be surprising to know that several others gained from the pandemic outbreak. The cannabis industry is one of those that recorded a significant boom during the pandemic when lockdown measures were in order. This significant impact on the industry is due to consumers’ need to entertain themselves while staying home.

The sector also recorded challenges when the lockdown started limiting most enterprises and businesses not offering essential services; it was difficult to tell if cannabis was an essential commodity or not. Despite the challenges, the pandemic’s impacts had an overall positive influence on the cannabis market in the following ways.

  • Increased Chances of Financial Assistance

The first quarter of 2020 saw bankruptcy hitting hard on many cannabis companies. These companies could not request bankruptcy relief since cannabis is a schedule 1 drug, and federal agencies are not willing to finance such industries with national resources. COVID-19 brought rays of hope to the industry as the pandemic outbreak is beginning to make federal courts consider the issuance of some bankruptcy relief to boost the economy. Several cannabis companies are also seeking state reliefs, which vary from state to state. Some lucky ones situated in a state with liberal laws have had access to financial assistants, which has helped the industry since the pandemic.

  • Merger and Acquisition

This challenging period also saw an initial sharp fall in the “Merger and Acquisition” activity. As the cannabis market began getting used to the new normalcy, companies had to devise means to survive the situation. Some cannabis brands started going into collaboration, giving rise to Merging and Acquisition throughout the industry. This has increased the number of surviving companies in the cannabis industry, unlike many other industries.

  • Increased Investments

The cannabis industry’s success during the pandemic can be significantly attributed to cannabis consulting firms’ efforts. These companies provide support to cannabis industries in various forms to enhance growth and development. They have immensely helped many companies navigate through the trying times of the pandemic. Consulting firms improve their reputation and maintain the brand integrity of cannabis companies. They ensure the cannabis industry comply with regulatory standards and help to a great extent in identifying fraud indicators and uncover adverse media and social media information.

The cannabis consulting firms have done a great deal of job in introducing cannabis investors to cannabis industries to give financial boosts to the cannabis industry by providing the industry a good outlook. During the pandemic, the sector’s success also made it attractive to potential investors who were fascinated by the increase in profitability in the industry when many others were crumbling.

  • Increased Recognition

The COVID-19 pandemic also caused a rise in cannabis tax benefits. Every nation’s economy is responsive to the tax benefits industries generate, and the weed dispensaries generated high sales during the pandemic, leading to increased tax revenues for the country. The sales of these recreational substances, coming from when most states are recording tax losses, is one primary reason many states are looking forward to the legalization of the controversial plant.

The controversies on cannabis as a medicinal drug increased when claims that the plant could be used to treat COVID-19. Many consumers were gullible, especially during heightened panic due to the virus, leading to the increase in consumption of cannabis as was since in other medicinal plants that were rumored to be potential cures for the virus.

There have been previous claims on the potentials of cannabis in the cure of cancer, HIV, and many other terminal illnesses. The FDA has been careful about the legalization of the plant’s use; however, the plant’s recognition, especially during COVID-19, has increased its research focus, which is a potential win for the industry.

With the many controversies in the industry, it is fascinating to know it is still one of the thriving ones at a time when the market economy has been dramatically destabilized. Many factors have contributed to the industry’s success; one can, however, not ignore the great role cannabis consultants have played in the feat recorded by the industry.