Planned expansions have been shelved, just like hiring. Investments, too, are delayed in this unimaginable time. What the legal weed industry will look like after the crisis passes is something we cannot know, Dan Mitchell observes. But one thing we do know is things are changing fast, beginning right now.
WeedWeek
- On deck is a more speedy consolidation of cannabis than the already eyebrow-raising consolidation that dominated 2019. Not only are more mergers and acquisitions on the way, so is the expansion of larger companies’ market share.
- COVID-19’s marijuana impact could be an 18-month ordeal, according to Michael Boniello, managing director of the San Francisco cannabis investment firm Poseidon Asset Management. Some, however, view 18 months as a high-side estimate.
- Cannabis may be recession-proof, but cannabis companies are not. Presently the over-leveraged industry is struggling with travel limitations, skittish investors and its ever-present banking issues.
- While all of this may sound daunting, being designated an essential industry provided legal weed with a watershed moment. Waiting on banking resolution and virus duration, investors remain poised to spend. One analyst observes that “demand for cannabis is relatively inelastic: It doesn’t fall, or doesn’t fall much, during economic downtimes. It might even rise, as liquor sales tend to do during recessions. “
Quick Hit
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Torry Holistics co-owners Tony Hall and Doug Gans have donated more than 17,000 N95 face masks and hand sanitizer to various San Diego health centers and local organizations. In Nevada County, operator Jahlibyrd took their private-public cooperation even further, ordering roughly 40,000 KN95 masks and distributing at least 15,000 to Northern California fire and police departments, medical facilities and cannabis retailers.
The Union (Nevada County, CA)/Cannabis Business Times
