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Coronavirus Shutdown Could Advance Federal Cannabis Legalization
With more than 20 states deeming either medical or adult-use cannabis dispensaries as essential businesses, we could see more movement in the federal cannabis legalization front. The economic benefits of cannabis are evident as the shutdown keeps many unemployed, quarantined and worried about their loved ones.
A bright spot in all of this is that the government is starting to seriously consider the benefits of cannabis legalization and taxation after months of lockdown. We are dealing with a time of great uncertainty on both the regulatory and consumer-side.
Cannabis Legalization Economics
Cannabis stocks were struggling during the beginning of the shutdown but have recently shown resilience. Americans spent $12.4 billion on legal recreational and medical cannabis in 2019, according to Arcview Market Research BDS Analytics. Governments do have to play it safe. One thing government officials have to consider in regard to federal cannabis legalization is that overtaxing products could lead to driving many consumers back to the black market.
In these dire times people are baking harder and higher than ever. Are you surprised? You would think for a virus that greatly affects smokers, inhalables would be on the decline. However, it only seems like a small number of people are changing their behaviors. Flower is just as popular as ever, with newer users reporting an interest in lozenges and gummies.
New Cannabis Consumers
Curaleaf and Organigram Holdings, Inc. have reported an increase in interest for edibles and tinctures. It’s not all money as medical patients have been on the rise with older clientele joining the industry. Many of whom are interested in the pain and sleep relief benefits of cannabis.
Public policy associate for iAnthus Capital, Susanna Short has noted a similar trend. In New Jersey’s medical cannabis program, out of the 4,200 to sign up between March and April about 2,000 cited anxiety as a reason for cannabis use. It is very likely that federal cannabis legalization will all depend on the outcome of the presidential election later this year. However more legislators are understanding the benefits of cannabis tax revenue.