By Hershel Gerson, CEO and Managing Director of ELLO Capital .
In the vastly disrupted economic and social reality created by the COVID-19 pandemic, many industries appear to be trapped in a downward spiral. As international airlines, hospitality providers, and a broad range of other sectors seek bailouts and federal assistance, the cannabis industry has shown signs of thriving amid the volatility.
Cannabis – and related industries, including hemp and CBD – have grown over the last several weeks, despite a multitude of regulatory and operational difficulties. In 2019, the cannabis industry experienced growing pains and market corrections that shook confidence in the sector for some investors. But as the COVID-19 crisis expands, the situation is showing signs that it could be a catalyst for growth in the cannabis market. Current data supports anecdotal evidence of increased demand, and the potential for social change suggests the uptick could be a precursor for a new era of acceptance.
“Lines Around The Corner” For Cannabis Retailers
Current estimates for self-quarantine and social distancing efforts range from two weeks to several months. In response to the flurry of “Shelter at Home” and other self-quarantine orders last week, the public responded by stocking up on cannabis products to help endure the coming days of isolation. For example, in California, adult-use sales spiked by 159% on March 16th in a same-day sales comparison to 2019. The state of Washington exhibited a 100% increase in sales in the same comparison. In Massachusetts, where many dispensaries have traded walk-in service for a “to-go” style model, lines stretch around city blocks, and the state has allowed deliveries to be expanded to promote social distancing.
Will Demand Last?
The surge is a result of adult-use customers flocking to stores to stock up for the weeks to come. Medical patients, who rely on cannabis as a less addictive and more natural treatment for chronic pain and conditions such as anxiety, multiple sclerosis, and Parkinson’s disease, …