Everything We Know About Coronavirus and Cannabis | Business, Politics, Staying Safe
The Coronavirus Pandemic has now seriously affected every industry – including cannabis. So on today’s episode today we went through everything that we know about Covid-19 and its effect on the cannabis industry and cannabis users.
Check out our interview or read the re-cap below!
Cannabis Event Cancellation:
First and foremost, an obvious effect of the Coronavirus is event cancellations. Some of the biggest events of the year are either rescheduled or canceled like:
There are loads of other canceled events in the cannabis industry. Loss of in-person events translates directly into a lot of company’s marketing strategies and dollars for 2020. The events themselves have been hesitant, but large names pulling out and public government making the call have forced the decisions.
Manufacturing and Supply Chain:
A lot of companies rely on cheap Chinese manufacturing and products. Especially vaporizers but also things like hemp flower and other ancillary products, even packaging.
Because of quarantines in China, it is likely that there will be a supply shortage which is going to especially affect lower-end cannabis companies using less expensive manufacturing from overseas.
They also might experience quarantined products because of a potential for things to get held in transition between boat and stateside.
Because of this, prices may go up. The basic economic concept of supply and demand states If supply goes down and demand maintains, then prices go up. So we may see a market fluctuation. We don’t think that we’ve seen it yet – Little too soon to call it, but something’s likley to change.
The silver lining here is that if the supply chain is slowing down from China, people are potentially going to go internal and look for (whats often better quality) American/Canadian product.
Let’s go to the numbers. A lot of companies – the big ones – are way down in percentage-wise.
Tilray a subsidiary of privateer holdings, a Canadian based grow op is down 40% in the last week, 57% in the last month and 60.66% in the last three months and also down 89% over the last year. Ouch (here are some numbers).
Last week’s drop of nearly 40% – Tilray losing roughly four-tenths of its valuation in a week could be coronavirus related. That’s got to also have something to do with market instability. Coronavirus doesn’t necessarily directly affect a Canadian grow op, but it does affect confidence in marketplace valuation.
Would this be a good time for me to invest?
You have to take into account the potential of the longterm effects of manufacturing. Any company that is heavily vested in a cheaply manufactured product might be a poor investment.
But somebody for example, like a grow op that’s just seeing an immediate market fluctuation due to market instability and lack of competence in the markets – this could be a perfect time to get in. The hope is by the Autumn cultivation season there could be some opportunity there.
It might be a good place to get into something where the longterm effects of a pandemic like this wouldn’t have a lasting effect on the business. So this would be a good time. This is where market research, as opposed to technical analysis, would come into play.
If you can identify companies that aren’t heavily invested in overseas manufacturing and are just experiencing market valuation dip due to lack of confidence, it might be a good time to invest.
Consumer Angle and Overall Product Sales?
I don’t think that market demand for cannabis and the usage of cannabis is going to go down. There are some ways to consume cannabis that are inadvisable like smoking flower that could have small effects.
Are people going to stock up a month’s worth of weed just in case? Not likely either. Some people may be so afraid to leave their house that they won’t go to the dispensary or to big public events, but likely overall sales are a non-issue.
Politics and Legalization Efforts:
Something that’ll be interesting to see are legalization efforts potentially getting stalled. Certain politicians were putting a lot of effort into cannabis legalization and a lot of those efforts might get stalled because of coronavirus., Drafting bills and bill introductions might be pushed back because there’s an immediate need for something else.
When a pandemic becomes a part of the social consciousness and an issue that we could have longterm ripple effects. It could be till next year that we see these efforts pick back up because different legislation will get pushed back.
It really depends on how long this lasts. How many more things get canceled. Right now we have very little information.
How Can We Be Safer Cannabis Consumers?
Deeply cutting back or taking a break from actual smoking is advisable.
If you must smoke – make sure you are not sharing joints, bongs, pipes, etc. Have your own personal smoking device.
Do not believe the hype that CBD cures everything including the Coronavirus.
CBD is not a cure, but stress can compromise your immune system. When your immune system is compromised, you’re more likely to pick up things and get them worse or susceptible to the virus. So if you are taking CBD every day and it’s something that helps your stress levels, then you might be putting yourself in a better position.
Wash your hands and be smart!
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