The cannabis industry is not one that is new to periods of uncertainties. Prior to the widespread wave of acceptance of the past couple of years, cannabis was mostly seen as a harmful narcotic drug. Although this is false it was the gospel at the time; thankfully we all now know the beneficial natural herb for what it truly is. The cannabis industry has faced really tough adversities and the industry survived these tough times through doggedness and resilience. The industry will also need such resilience with the recent turn of events following the effects of the COVID-19 pandemic.
In this article, I’ll look into how the cannabis industry is shaping up to address recent uncertainties that have risen to challenge the industry.
Uncertainties Around the Cannabis Industry
The cannabis industry has come a long way from the period of stigmatization and criminalization. The era of the general war on drugs saw many dissociate from anything that involves cannabis. However, the cannabis industry has come a very long way from that era. The cannabis industry is now stated to grow to $74 billion in 2027. The new challenges that face the cannabis industry are still some they are used to and some new ones.
Despite the growing acceptance and opening of legal markets in the US, it is still illegal federally. The scheduling and criminalization of cannabis by the FDA still puts a major stumbling block before the cannabis industry. This has posed issues to the growth of the industry and has limited centralization of the market structure. With a fragmented market structure, the cannabis industry is yet to fully maximize the potential of the industry. The other major problem that has cast uncertainty on the cannabis industry is the COVID-19 pandemic and its impact on the economy.
With the development of the COVID-19 pandemic, the response from major governments of the world was to enforce general lockdown procedures. This meant that many retail stores and businesses had to close down. This affected the power of retailers to ensure logistical and transport measures are well put in place to foster the supply chain. It also affected the buying nature of consumers.
The onset of the lockdown by different states increased anxiety among people both on the account of the lockdown and gruesome facts of the pandemic. This spurred a huge rise in the purchase of cannabis products. 48% of Americans were researched to be feeling anxious on the account of the COVID-19 pandemic. The Black Lives Matter protests did not help matters as well as anxiety grew among people and many ran to cannabis for relief. Statistics also showed that many were using their stimulus checks to purchase cannabis products to deal with anxiety.
With this reality and increasing demand, here are some of the ways the cannabis industry shaped to deal with the uncertainties.
Cannabis is Designated as an Essential Service
The lockdown procedures put forward by governments ensured that only essential services were allowed to open during the lockdown. Many governments with legal laws open up cannabis businesses as essential services this lockdown. This spiked an increase in sales in many regions. California in March saw a 159% increase in cannabis sales. This privilege was also open to alcoholic stores as well, but stats show many people were buying weed to stockpile. The uncertainty regarding the length of the lockdown spurred on stockpiling character among buyers as cannabis was the way out for calm and relaxation amid the pandemic.
Due to this new demand in the cannabis industry, different structures in the industry made changes to be able to address these needs. Prior to the lockdown, telemedicine was not available for medical cannabis. However, with the limit on one-on-one interactions during the lockdown, the avenue was open for the industry to maximize. Veriheal, a canna-tech company that helps medical marijuana users get their cards recorded a huge increase in applications. The company prior to lockdown had 50% of its customers online and 50% offline. The lockdown however brought about 90% of online applicants and an increase in applications.
The cannabis industry, therefore, moved to ensure quality delivery services were made available to ensure cannabis products can be easily made available. Some companies in the industry also adopted digital payment platforms to make accessibility easier during the lockdown.
Growth of Non-THC products
The growth of cannabis has also equally seen the growth of some of its cannabinoids. Different researches have been carried out to validate the medicinal benefits of the natural herb. This helped to increase the popularity of CBD into a $5 billion industry. CBD was therefore made available in different forms such as oils, tinctures, and topical creams.
The cannabis industry answered the uncertainty around THC by propagating non-THC products like CBD. The non-psychoactive nature of the cannabinoid makes it popular among medical marijuana users. It helps them to be on the right side of the law with limited chances of being on the wrong side of employment agreements. CBD was made available and accessible in different forms and platforms to further consolidate the industry. There are also varieties of CBD made available which include full-spectrum, broad-spectrum, and isolate.
Standardization of Supply Channels
The cannabis cultivators and suppliers are the backbones of the industry. They determine whether products will be available and the quality of products made available. To meet the growing demand placed on the industry during the lockdown, players in the industry moved to stabilize supply chains. More cannabis growers are heading into large scale production despite the uncertainty of the regulations by the federal government. This shows the resilience of the industry to continually grown irrespective of uncertainties that surround it.
The cannabis industry is here to stay and the moves being made by significant players in the industry show that. Despite the growing changes around the industry, the cannabis industry is gradually adapting to meet those demands and surge forward. It is obvious that the industry is making the right moves in the right direction and can only head higher from here on.
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