The Cannabis Investment Outlook Post-Pandemic
Cannabis is now considered essential goods. Even if a relapse of COVID occurs, cannabis companies now know they need to be pandemic-prepped and ready to serve. Cannabis laws prohibit interstate commerce. This means that disruptions to the chain of production are limited to in-state businesses and how efficiently they can react to their changes. Cannabis legalization is happening across the country, with new states coming online and even the SAFE act potentially allowing for federal banking.
Social acceptance is spreading due to use during COVID, this leads to pro-cannabis voters and governments wanting to cash-in on the rapidly expanding industry. New technology is being developed to better serve consumers and legitimize the cannabis industry and with potential federal legalization looming on the horizon. Federal legalization could then combine the pandemic-ready industry with a new, country-wide business model.
Pre-pandemic, it may have been the case that investors lost trust in the burgeoning industry with promises that every product is a unicorn. Post-pandemic, investors can see more of what the future will look like and what cannabis can and will achieve. COVID-19 has literally changed the way the world does business and surprisingly for the cannabis industry, it has mostly been a positive change. Right now, venture capital, institutional, and investors may be bleeding out from their traditional investments – like hotels, restaurants, and non-essential goods. Cannabis investors are now more savvy about investing and focus more on a strong team, operational experience, and a clear plan of action. Ultimately, the “Green Rush” is far from over.
COVID-19 breathed in a breath of fresh-air into the previously damaged industry. Cannabis investments could now be considered a safer investment purely due to its status but investor experience in 2019 have made it so that companies need to be held to the same standard as investing in any other industry. Yet, the foundation for cannabis post-pandemic show a bright path that investing now could potentially result in massive returns when cannabis becomes federally legalized. Cannabis investors faced difficult battles in 2019 but post-pandemic – cannabis companies may see a surge of investment in recession-proof industry.