Uncertain times often lead to surprising success stories. The COVID-19 pandemic crushed entire industries, while pushing cannabis ever closer to full legitimacy. Marijuana businesses depend on innovation – something that is critical in the current environment. As COVID-19 rages, rapid-fire local legislation often disrupts traditional supply lines. Given the patchwork of laws and questionable legality in many jurisdictions, marijuana companies have always adapted quickly to this type of changing situation.
Cannabis has clearly reached a tipping point in public perception. Almost every state in America allows some form of medical or recreational access – a far cry from even a decade prior. Now, dispensaries in several states are being deemed “essential” services for the purposes of COVID-19. While the industry remains in flux due to federal law, it represents one of the fastest growing job markets in the United States. The coronavirus may well be the final catalyst for full acceptance.
Silver-Linings From Aurora and Curaleaf Q1 Results
Prior to the pandemic, marijuana faced a stumbling block. Stagnating markets abounded as progress halted on a federal level. Aurora Cannabis (NYSE: ACB) suffered a slow bleed that resulted from a recent reverse stock split. Yet, the coronavirus-supplied surge in sales may help temporarily defeat that slump as they head into the next quarter. High sales volumes and changes in buying habits fueled the sudden increase. However, the risk of further dilution at some point in the future is always a concern with Aurora.
Similarly, Curaleaf (OTCQX: CURLF) (CSE: CURA) suffered setbacks in the first quarter. Despite this fact, they believe that the next quarter will show a high level of growth. As areas re-open for business, more sales vectors will become available. Further, it will allow these businesses to establish infrastructure that can persist through similar shutdowns – should they occur in the future.
Could Cannabis Offer Insights Into Protecting Against COVID-19?
While the only complete solution to the coronavirus lay in vaccine development, promising research offers some level of protection. Among the potential protectants are several strains of medical marijuana. A team of Canadian researchers believe that high CBD/low THC strains may block up to 70% of the proteins that COVID-19 uses to infect cells. Developments in this direction, coupled with widespread usage of masks and sanitary habits could help slow the spread considerably.
However, consumer should beware of spurious claims made without backing. Some stores have touted improved immunity through cannabis-related products. While the FDA and state authorities are harshly cracking down on these unproven claims, they could still damage the industries reputation if they proliferate without hard evidence backing up their claims.
The cannabis industry still has a long road to recovery, but the pandemic could be just what was needed to push cannabis back into growth-mode. The “normalizing” of adult-use of cannabis for recreational purposes is continuing to be accepted and, at some point, it will be hard for Washington D.C. to justify continuing its current stance on the issue.
Article By: Adam Stone