Undoubtedly, the ravaging COVID-19 pandemic has dealt a significant blow on every part of the global economy. And the cannabis industry isn’t an exception. On the highs, the lows, and different levels, the cannabis industry has been greatly hit by COVID-19. While normalcy is expected to return to all industries after COVID-19, the impact of this pandemic on the industrial sector remains a matter of utmost concern.
Obviously, the stockpiling of cannabis products by consumers led to a sharp rise in the revenue of several dispensaries. Regardless, the sharp rise was marred at the same rate when lockdowns were introduced across the world, giving room for essential services.
When COVID-19 hits the world, one of the primary issues of confusion is whether cannabis was an essential service or not. This led to a state of dilemma in San Francisco when the government classified cannabis as a non-essential service.
Since that time, there have been several battles regarding cannabis in terms of classification as essential or non-essential services. However, COVID-19 has left a significant impact on the cannabis industry, whether positive or negative. Let’s take a brief look at a few of the effects of COVID-19 on the cannabis market:
The Rise and Fall of Merger & Acquisitions
From the fourth quarter of 2019 till the first three months of 2020, no doubt, cannabis companies have suffered from bankruptcy. The first three quarters of 2020 was when the pandemic hit the entire world in the gut. Currently, cannabis and marijuana companies are left out of filing bankruptcy. This is because it is considered a schedule 1 drug. However, the federal courts are contemplating whether to issue a bankruptcy to cushion the effect of COVID-19 in this challenging time.
Marijuana Tax Benefits is on the Rise
The world is not immune to tax benefits any industry can provide. As a medical and recreational substance, cannabis comes in a time where the government awaits tax losses. When it comes to marijuana, potential tax revenues tend to be enormous. Therefore, many states are threading towards the legalization of cannabis plants.
Even if one marijuana dispensary can generate high sales during this trying time, it still has to bear substantial tax revenues. Any opportunity for the total legalization of this controversial plant is being sought for in both the state and federal legislative houses.
Clinical Trials of Cannabis Still Continues
As social distancing remains one of the preventive measures against COVID-19, clinical trials are hugely disrupted. However, there are other ways to keep up with further research by conducting a virtual check-in with test subjects while strictly adhering to the social distancing protocols.
Reports also revealed that FDA has dished out regulations regarding the same. This implies that cannabis companies can continue their research on the possible medical connection of COVID-19 with marijuana. This appears to be a positive sign for the cannabis industry in general.
While the COVID-19 has hugely impacted the cannabis industry, and the impacts continue to fluctuate, the future of cannabis still looks bright.
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