On March 11, 2020 the CoronaVirus outbreak was declared a global pandemic by The World Health Organization (WHO) due to the virus’, “alarming levels of spread and severity.” Ever since this announcement, many businesses and individuals have suffered tremendously. Non-Essential deemed businesses were forced to shut down causing an overwhelming surge of layoffs around the country. An all time U.S.A record of 3.28 million Americans had filed for unemployment in the week following the pandemic announcement by the WHO. Although the short-term effects are beginning to diminish, the long-term economic effects will continue to linger. The cannabis industry however experienced different effects overall, which is very positive for the future of this market.
A period of Opportunity for Cannabis
At the height of the pandemic, some states issued a stay at home order, which shut down all business and jobs that are not considered to be essential. This was done for the well-being and safety of the respective communities. Although this was a difficult time for most businesses, the cannabis industry demonstrated exponential growth. Of the legal, both adult-use and medical, states, more than 20 states deemed cannabis essential during the Coronavirus outbreak. Cannabis, a highly criticized industry, went from being an afterthought of many to an essential business. Despite the economic drought nationwide, this was a period of opportunity for the cannabis industry. According to Leafly, Cannabis is now a $18.3 billion dollar industry, which represents a 71% increase over 2019 numbers, the industry also added 77,300 jobs in 2020, which is a 32% increase from 2019. As a result of this growth, it pushed some states to legalize cannabis and take part in the industry.
The Pressures Felt by States
Considering many businesses were placed on “pause” over the past year, states were not able to generate enough tax revenue. With that being said, they are forced to come up with innovative methods to generate new tax income. In view of the cannabis industry taking flight in the midst of a global pandemic, some states felt the pressures to legalize the use of cannabis in an attempt to generate more tax dollars. During 2020, Arizona, Montana, New Jersey, and South Dakota all legalized recreational marajuana. As a result of these states joining the cannabis industry, it has influenced more states to get involved. For example, as 2021 continues and as you’re likely aware, New York recently signed a bill legalizing adult-use marajuana. Based on the recent events and need for more tax revenue, it is likely that more states are to follow swiftly.
What This Means Moving Forward
As a result of the Cannabis industry thriving in an economic downfall, the potential of the industry becomes indisputable. Nonetheless, when most businesses were deemed nonessential, cannabis proved its worth by reaching unparalleled numbers across the country. Not only did cannabis solidify itself as an essential industry, but it showed there is so much more to come. Especially with more states beginning to take part in the industry, the demonization of marajuana that was once very powerful is starting to evaporate. The industry is headed towards the right direction, and here at Alpharoot we could not be more excited to see what is next!