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Why 2020 Proves the Cannabis Industry is Here to Stay

Let’s face it – the last few years have been challenging for the cannabis industry and for cannabis stock investors. Although many cannabis startups posted significant losses, with many closing their doors due to cashflow issues – 2020 was not the catastrophic industry-ender that many had anticipated. While many industries were struggling to survive due to the pandemic and the various lockdowns of 2020, especially those that rely heavily on brick and mortar sales, cannabis companies adapted quickly to the new reality and continue to stay open, keep employees in their jobs and serve their customers. In the following article, we take a look at why 2020 proves the cannabis industry is here to stay.

Cannabis Companies Learn to Adapt

Why 2020 Proves the Cannabis Industry is Here to Stay

The vast majority of the challenges faced by the cannabis industry in 2020 are directly attributed to the Covid-19 pandemic and the loss of life caused by it. In addition to that, there were many economic consequences suffered by the industry as well.

Consequences like supply chain disruptions with countries like China closing their borders and lockdowns in several cities that ended in-store sales for many cannabis dispensaries all posed a severe challenge to the bottom line for many in the industry. Curaleaf Holdings, one of the industry leaders in the cannabis industry, posted a first-quarter loss of USD $15 Million in 2020, despite reporting total revenues over USD $200 Million in Q1 and USD $20 Million EBITDA.

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While this first-quarter performance led to a mass exodus of cannabis stock investors, those that stayed enjoyed a bounce-back later in the year that was primarily due to the ability of cannabis companies to adapt to the needs of the new market.

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“Throughout this, we’re adapting. We don’t know how long it’s going to go on. Years? A month? We don’t know… But you don’t want to be the guy who’s waiting. There were some retailers in Vegas that just shut their doors.” said Brandon Rexroad, CEO of Portland, Oregon-based MSO Shango Premium Cannabis, which has stores in Las Vegas. Mr. Rexroad and many other industry leaders believed that waiting could have been fatal for their businesses and chose to adapt and evolve with the times.

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Many cannabis companies switched to online sales, delivery and curbside pickups to overcome social distancing guidelines while also doing their best to keep their customers and employees safe. This adaptation of their sales models to fit the Covid-19 guidelines meant that they could continue to serve their employees safely while other industries were waiting out the pandemic. This made many declare that the cannabis industry was recession-proof, which is the kind of language that attracts investors looking to make low-risk investments.

Cannabis Businesses Designated as Essential

Cannabis Businesses Designated as Essential

Due to the need for medical marijuana for patients that have to take it as prescribed by their doctors, several states, at least 24, had to declare the cannabis industry essential to the economy. One of the first states to do this was Colorado, where Gov. Jared Polis designated marijuana as a critical retail industry on March 22, 2020. His declaration allowed medical marijuana purchases to be made at shops and recreational cannabis to be picked up curbside.

This designation of ‘essential’ has helped alleviate a lot of the stigma that has kept many potential consumers and investors away as cannabis has fought to secure legal status globally.

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This adaptability and resilience has proven many doubters wrong and has many believing that since it survived the pandemic and recession of 2020, the cannabis industry is here to stay. How will you profit? Subscribe to our newsletter for the best cannabis stock tips now and checkout our latest predictions for the 3 Best Cannabis Stocks for 2021.

Why 2020 Proves the Cannabis Industry is Here to Stay

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