As the global economy suffers, cannabis stocks are still performing relatively well
Most likely, people in the world will need to find a new normal after all the commotion the outbreak of coronavirus is causing, especially with the impact is having on the world economy. COVID-19 continues to take over the world, with thousands of new cases in the US leading people to isolate and maintain a habit of social distance. The cannabis industry is in the middle of a very interesting scenario that can turn into an advantage for a sector that has been suffering for over a year, and cannabis stocks may actually rise due to the global coronavirus pandemic.
One advantage that cannabis has in front of other substances to entertain people is that, according to a survey conducted in the US and Canada, cannabis users prefer to consume cannabis in very small gatherings of just a few people. Alcohol users, on the other hand, enjoy the effects of alcohol much more when in the middle of much larger people gatherings. According to Bill Kirk, analyst from MKM Partners, this information suggests that the “stay at home” substance that people will seek amid the pandemic is cannabis. At the same time, alcohol consumption will most likely decline.
Also extracted from the same survey, it was observed that 68% of cannabis consumers prefer cannabis when alone, way more than the 42% who would rather have alcohol in the same scenario. Another good point made by Kirk is that the price of cannabis has dropped considerably, and that means that new consumers might be drawn to engage in this activity for the first time.
Even if it was showing minor signs of recovery, the cannabis industry was on a downfall since before the outbreak of coronavirus, mainly attributed to high expectations and overexpansion from the largest producers. All these factors are coming together to make this an ideal time for long term investors to actually consider putting money in an industry that will continue growing despite all the roadblocks.