Just like with the alcohol industry, cannabis sales might not suffer a major dip during a recession
At this point, it is evident that the business world is being truly shaken by the current development of the coronavirus pandemic. It spreads so easily that businesses are paused so people can isolate and stop the virus propagation. For the cannabis industry, things seem to be different and its behavior in the market resembles more like the one the alcohol industry has. Several economy analysts and watchers, Bank of America included, have agreed that the world has entered into a recession. This is not all bad news for the cannabis industry, as experts believe that cannabis companies can hold up in a severe downturn.
Industry experts state that cannabis consumers considered marijuana to be among the essential needs, just as pharmaceutical medicines and toilet paper. The alcohol industry, for instance, has presented a parallel behavior in past experiences. Back in 2007, when there was a recession, alcohol sales increased at the wholesale level and had a good performance throughout the recession period, even increase with time. The former cannabis regulator of Sacramento, CA, Joe Devlin, who is now a senior vice president with Ikänik Farms, states that, because marijuana has fallen into the same category as alcohol, it is “relatively recession-proof.” It is a means for relaxation, and its consumers can give it as a reward to themselves.
It is not likely that cannabis users will decide to cut back marijuana from their budgets. “A lot of these sin businesses – like alcohol, tobacco and cannabis – they hold up better in periods of recession than other traditional businesses,” said Beau Whitney, an Oregon-based economist who has worked for multiple cannabis firms, including New Frontier Data in Washington, DC.