The CBD and Hemp industry has no doubt been negatively affected by the COVID-19 pandemic. Unlike many others, it has remained intact among a landscape of widespread economic hardship. There are many different components of the cannabis industry, from growers to consumers, each of them being diversely affected by the virus. Providing a clear, comprehensive outline of how each main sector looks in today’s world will help all those who interact with this industry in any capacity.
CBD Retail and Medical sales has by far been the most successful sector of the overarching cannabis industry during the pandemic. Retail stores and dispensaries have remained open during the pandemic, both being deemed an essential business. Millions of Americans each day rely heavily on recreational and medicinal CBD and hemp products to help treat common medical issues.
In fact, there are numerous outlets that have reported an uptick in CBD sales during the pandemic. According to MarketWatch, online CBD sales grew throughout the COVID-19 lockdowns, with brick-and-mortar retail stores seeing an even bigger spike in revenues as states reopen. A survey of CBD consumers from Brightfield Group found that online sales during the period would increase significantly, an idea that has since been supported by several accounts from some of the largest CBD companies in the US, including industry giant Charlotte’s Web.
At the beginning of the coronavirus pandemic in the United States, there was much confusion as to what was going to happen next. This general uncertainty had an effect on every aspect of American life. With no idea how CBD and hemp sales would be affected by COVID-19, there is no doubt that the cannabis industry’s agricultural sector faced severe disruptions along the supply chain. A look into the federal response to the economic crisis gives us valuable insight as to what exactly hemp farmers are going through right now.
In an effort to provide financial relief to the agricultural industry, the USDA has announced the Coronavirus Food Assistance Program, or CFAP. The act will provide $16 billion dollars in federal aid to farmers, along with increased flexibility on farm loans, commodity loans, and crop insurance. In addition, the US Small Business Administration now offers multiple programs, such as the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL), that are also available to farmers and growers that have been adversely affected by the COVID-19 pandemic. These programs are an indicator of the times we are in, and the hardships that hemp farmers face. Stunningly, and unfortunately, the federal government has specifically excluded hemp farmers from CFAP, making the road to recovery much harder for members of our industry trying to weather the harsh effects of COVID-19.
The finance and investment side of the cannabis and hemp industry has also been affected by the public health crisis. Before the pandemic, the financial sector of the cannabis industry was on shaky ground, but how did it fare after the pandemic hit? When the stock market crashed in February of 2020 due to COVID-19, it took many stocks with it, erasing gains built over years of trading. This includes industry giants like Canopy Growth (CGC), Aurora Cannabis (ACB), GW Pharmaceuticals (GWPRF), among many others who took a hit as indexes began to fall. As of June 2020, the market seems to have rebounded, with most cannabis and hemp stocks seeing increasingly positive growth.
As the investment side of the cannabis and hemp industry is in its relative infancy, stock prices are relatively low, with the largest publicly traded companies trading currently at around $5-15 dollars a share. The cannabis and hemp market are relatively easy to get into, and according to several reports, the cannabis industry is due for some serious growth in the years to come, with some projecting that the market will be worth $73.6 Billion by the year 2027. Although the market took a tumble in early 2020 due to the negative effects of COVID-19, investors should remain confident in this rapidly growing industry, as it shows no signs of slowing down. Everyone loves a comeback, right?
Trade shows and events are a crucial part of the cannabis and hemp industry, connecting the best of the entire industry together, from vendors to consumers. Due to the nature of a public health crisis and pandemic, large gatherings of tens of thousands in convention centers, exhibit halls, and meeting rooms have been put on hold, postponed, or canceled in an effort to slow the spread of the virus. Starting with the cancellation of huge events like SXSW, the rest of the trade show and events industry would soon follow, with cannabis and hemp events not too far behind.
As society becomes more acclimated to life with COVID-19, there are constantly new and innovative ways to interact with people while following good public health practices, and staying safe and healthy. This includes but is not limited to using PPE (Personal Protective Equipment), such as masks, gloves, and sanitizer, and adhering to social distancing guidelines recommended by the CDC (Centers for Disease Control and Prevention). As the world changes, the events and trade show industry changes with it, adopting not only the enforcement of these standards but other new measures, such as the use of large, plastic dividers seen at Las Vegas casinos, convenience stores, supermarkets, nail salons and more. These are designed to maintain a safe distance, and provide a protective barrier that blocks harmful germs from being transmitted between people. Some companies, like online commerce giant Alibaba, have used the advent of the virtual trade show in an effort to spur economic growth, and keep the events and trade show industry going in a time of struggle.
What Does This Mean for You?
COVID-19 has changed our society in ways that most never thought possible- affecting the lives of billions of people around the world, more than any single event in modern history. Almost all people have had to alter the course of their lives in some way, whether it be staying at home from work, wearing protective equipment in public, or just sanitizing more often than usual. The cannabis, hemp, and CBD industry has been no different, with each and every sector being affected in different ways, some more dramatically than others.
Through hardship, as we have seen in the past few months, difficult situations have led to the forging of groundbreaking solutions. As members of the cannabis and hemp community, we are all affected by the way the industry is doing. It is incredibly important to recognize and understand its impact, in order to understand how to interact with the CBD and hemp industry, along with how it functions and responds to external events. We remain positive as our world begins to reopen, and as we look towards a future of progress and prosperity.