Cannabis sales have seen significant growth recently as consumers around the country continue to stockpile supplies to prepare for prolonged self-isolation.
This phenomenon isn’t new, of course. Historically, as the economy starts to go down, consumers tend to rely more on vices such as alcohol or, in this case, weed.
As dispensaries in many areas are being considered essential businesses, cannabis sales may continue to surge for the foreseeable future.
Alcohol Use Increases as Economy Goes Down
As cannabis has only recently become legal in certain areas around the country, not much research has been done into cannabis use during times of recession.
Alcohol, on the other hand, is a different story. Several studies have demonstrated a link between economic downturns and increased alcohol usage. This study, for example, noted a 7.2% increase in the prevalence of frequent binge drinking during the 2008 – 2009 recession.
Similarly, another study found that, although one might expect alcohol consumption to go down due to decreased income, people tend to self-medicate with alcohol during difficult economic periods.
Michael T. French, PhD, a professor at the University of Miami who participated in this study, stated, “It was thought that when unemployment goes up, income goes down and people will consume less because they don’t have the resources,” he continued, “If you have more free time, you can engage in activities like drinking more frequently than if you were employed. The self-medication and leisure time effect are dominating the income effect.”
Cannabis Sales Soar
While the aforementioned studies apply only to alcohol, the results could potentially hold true for cannabis.
As the coronavirus continues to spread throughout the United States and wreak havoc on the economy, one sector that doesn’t appear to be struggling is cannabis.
Cannabis sales in California, for example, rose 56% one day before San Francisco implemented a citywide shelter-in-place order, according to the analytics company Headset. In Oregon, marijuana sales increased by an even larger 75%.
Marijuana delivery services are also seeing surges in sales. Eaze, an online cannabis delivery platform, reported a 50% increase in first-time orders, per the Associated Press.
However, these numbers aren’t necessarily sustainable. While sales are likely to remain strong as dispensaries are declared essential businesses, they may start to fall from these new highs as consumers start to realize there are no shortages.
CEO of cannabis consulting firm Siva Enterprises, Avis Bulbulyan, said, “The cannabis industry is showing itself to be recession-proof but at times like this, it’s important to understand that the spike in consumer demand is probably not going to last long.”
Article By: Connor Beam