The global pandemic of COVID-19 played havoc with supply and demand all over the world, and continues to do so today. So many industries are still experiencing unprecedented change and market aftershocks from COVID-19. Naturally, many of us are wondering about emerging industries and how they weathered the pandemic. Whether you're a current or future investor, or our friendly neighbourhood stoner, how did the cannabis industry fare?
On Oct. 17th of 2018, Canada became the second country in the world to fully legalize recreational use of marijuana. October of 2018 and December of 2019 (when the world was discovering COVID-19) are not really that far apart. How does an industry barely a year old and as heavily stigmatized as cannabis survive a situation like this?
Surprising some market analysts (and absolutely zero stoners) the legal weed industry flourished during the pandemic. The four top Canadian provinces for cannabis sales reported between a 10% and 20% sales increase between February 2020 to March 2020. Subsequent months' sales hovered around the increased numbers, especially during months of quarantines and restrictions. Who would have thought that public health restrictions requiring us all to stay home more would benefit industries like alcohol and cannabis? **gasp**!
Canada, and Alberta itself, generally designated cannabis dispensaries as “essential” businesses so they were allowed to stay open during the harshest restrictions, along with liquor stores, grocery stores, pharmacies, and some other businesses. Some cannabis retail locations were forced to lay off some staff due to reduced hours or social distancing requirements, but with so many folks stuck at home and bored, cannabis was a tempting distraction.
A lot of occasional users toked a few extra times per week. A number of frequent users might have hit the bong even more frequently. And even some people who had never used cannabis products before took the opportunity of being stuck at home to give it a shot. When you're stuck at home, what's wrong with making your third time binge-watching Tiger King a little better?
Weed has long been shown to be a very social drug (some users would only smoke with friends at a party, for example). COVID definitely put a hit into the type of use cannabis saw; people have been much less likely to share their joints and bongs since the pandemic began. So perhaps we're not all standing in a circle passing a joint around anymore, but demand for cannabis products hasn't significantly dipped throughout the pandemic. Under local restrictions or personal caution? People are smoking solo. When restrictions allow? People are smoking with their friends as usual. Quarantines, restrictions, and its more-frequent use are starting to combat some of the stigma. The cannabis industry is stronger than ever.