General Health

HOW CORONAVIRUS IMPACTED THE CBD INDUSTRY

As of 27 March, we’ve seen over 530,000 confirmed cases of coronavirus (COVID-19) across 199 countries. Because the outbreak develops, Prohibition Partners is monitoring things and reporting the probable impacts for the nascent cannabis industry. Last week we reviewed what a worldwide recession would mean for the industry, how the CBD industry could fare during the pandemic, and how public attitudes might shift in response to the outbreak. In the week, we review the extent to which different consumer groups might change their behaviors and the potential broader implications for the industry.

COVID-19 and Its Impact on Consumption Patterns

Since COVID-19 took center stage in world affairs over the last month, consumption patterns altogether industries are rapidly shifting. However, the bulk of consumers in Europe and North America intend to maintain or increase their purchases of cannabis products within the coming months consistent with our recent marketing research, conducted last week.

Medical cannabis users are the first likely group to take care of current levels of consumption. Non-medical users, on the opposite hand, report more of intent to extend or decrease use. This might reflect the very fact that dosage recommendations remain relatively stable for medical users, while lifestyle changes will have a drastic effect on non-medical consumption.

Of course, the interpretation of consumer intent to plug reality might not be straightforward, and it’ll be a challenge to take care of supply lines over the subsequent few months. Medical resources, including healthcare professionals’ time and a spotlight, briefly supply and are directed towards managing the disease outbreak. Regions that are hooked into imports will face challenges in supply within the coming months as border restrictions tighten, and logistics professionals become unavailable. Regulators must now adapt to make sure supply lines are kept open so that distributors can meet demand. This is often already happening in regions like Pennsylvania, where patients can obtain online prescriptions that remain valid for 90 days instead of 30 and therefore the UK, where LYPHE Group, a UK-based medical cannabis group, has agreed on emergency measures with the house Office to import sublingual cannabis medications for the first time.

In line with our findings that folks are more likely to take care of or increase consumption within the coming months, there are numerous reports from North America and Europe that buyers are bulk-buying cannabis from dispensaries, resulting in record-breaking sales. Governments in regions like Quebec, Illinois, and, therefore, the Netherlands will keep cannabis stores open despite regional lockdown measures. This is often intended to take care of the supply of medicines to patients and, within the Netherlands’ case, a minimum of, to avoid a surge in untaxed black-market activity. Where businesses have remained functional, many must adopt innovative measures like offering takeaway and delivery services and accommodating telemedicine applications to minimize in-person interactions.

An Industry in Flux

The impact of the spread of COVID-19 has a record set for the steepest decline in the share price history. For example, purpose, we have mapped the performance of the two index funds to increase the COVID-19 case. Index funds are mutual funds that invest in companies’ specific choice and can be taken as a proxy for the stock performance of various verticals.        Shares of marijuana more reactive to increase COVID-19 compared to ordinary shares. Since the end of January 2020, cannabis stocks have taken steep losses than most but also have been quick to reply pair’s upticks. Stocks have bounced back since March 19, and thus, the rate of recovery in the capital of cannabis beat the rest of the market. Date Sunday 19 – March 26 saw an improvement of 14% against January 1 in selecting the value of the fund compared with 9.7% Harvest enjoyed by the Vanguard Total Market fund.

The Difference Between General and Specific Stocks Marijuana

There are two possible reasons that marijuana stocks are more reactive than those on the Vanguard Total stock exchange Index:

Cannabis may be a more volatile industry than most, with higher levels of active trading causing a more significant downturn in response to COVID-19 and a more robust recovery in response to plugging upticks.

Investors predicted that cannabis firms would lose revenue e.g. thanks to restricted movement and general economic slowdown. They’ll now be reacting to the rise in cannabis sales because of the market’s current general uptick.

Some revenue may yet be lost thanks to factors like disrupted supply chains, shop closures, restricted movement, and general economic slowdown. However, this might also prove a crucial time of innovation, planning, and strategizing for cannabis companies, the fruits of which can outlast the pandemic. For instance, if delivery services prove cost-effective, we may even see the normalization of this. For now, dispensaries must undertake their delivery services. It’s going to be those that can adapt to those delivery methods that will turn the first revenue during further lockdowns. This might suit many that accept restricted mobility even beyond the lockdowns. Conversely, those without access to delivery services like those in remote areas may have more challenges obtaining their products. Overall, innovative approaches to distribution and consumption may prompt long-lasting changes to how the industry operates for the higher.

Photo Credits to Hopkins Medicine Organization