Cannabis Sales Stay Strong, Sector is Mostly ‘Essential’ in U.S. and Canada

Cannabis Sales Stay Strong, Sector is Mostly ‘Essential’ in U.S. and Canada
Cannabis Sales Stay Strong, Sector is Mostly ‘Essential’ in U.S. and Canada
COVID-lockdown (cover) by N/A is licensed under Adobe Stock

While most sectors of the economy are taking it on the chin thanks to the current pandemic/lockdown, the cannabis sector has been relatively unaffected.

In both Canada and the United States, the vast majority of cannabis stores remain open  as "essential" businesses with at least online sales. Many jurisdictions are authorizing curbside pick-up, drive-throughs and home delivery. Some continue to permit in-store sales of cannabis.

The Big Picture in the cannabis industry looks like this at the moment.

In the U.S., only Massachusetts has blocked the sales of recreational cannabis among U.S. states that have fully legalized cannabis.

Alaska, California, Illinois, Michigan, Nevada, Oregon and Washington State continue to allow in-store cannabis sales (subject to social distancing requirements). Colorado is allowing curb-side pickup, as well as drive-through and walk-up windows.

Of the 33 U.S. states that have legalized cannabis for medicinal use, 28 states have exempted dispensaries from business closure orders.

While the state lockdowns have obviously had some impact on cannabis operations, in many jurisdictions this is being more than offset by rising consumption patterns as cannabis consumers cope with being shut in.

This March 20th article from USNews paints the picture.
Coronavirus Pandemic Boosts Marijuana Sales While Many Businesses Struggle

Sales in Colorado, Oregon, California, Washington state and Nevada spiked this week, with the size of the average order also up, according to data by cannabis analytics company Headset. Plus, several cities around the country have dubbed dispensaries "essential businesses" during coronavirus-related business shutdowns, meaning the storefronts can stay open.

The situation in Canada is similar, but with consumers having even broader access to cannabis.

Cannabis is fully legal in Canada. All ten provinces and three territories continue to allow cannabis sales.

Three provinces currently only allow online sales and/or home delivery and curb-side pickup: Ontario, Newfoundland, and Prince Edward Island. The remaining seven provinces (British Columbia, Alberta, Saskatchewan, Manitoba, Quebec, New Brunswick and Nova Scotia) allow in-store cannabis sales as well.

A March 19th article from CTV News illustrates a similar trend among Canadian cannabis consumers.
Cannabis sales soar as Canadians hunker down to stop coronavirus

To manage stress in the face of the coronavirus pandemic or just to pass the time under quarantine, Canadians and tourists have been lining up for several days at pot shops and flooding online cannabis retailers' sites to stock up on the mood-altering drug.

Most cannabis stocks (on both sides of the Border) are still struggling to gain traction.

But the current pandemic and associated lockdowns may be the trigger for a move higher rather than a further drag on the sector.

Investors can basically count on one hand the number of industries whose operations are either thriving or at least stable during the current economic conditions. Cannabis is one of them.

Many sectors that have been hard-hit by these lockdowns have seen stock valuations re-inflated due to the bailout dollars being thrown at them by Western governments. It remains to be seen how long these gravity-defying stocks can avoid a collision with economic fundamentals.

Meanwhile, with cannabis stocks already undervalued and sales continuing to grow, few sectors offer a similarly strong value proposition for investors.
Marijuana Industry, Original Content