The cannabis industry wasn't at its best before the arrival of the oriental virus on American soil. Although the anxiety it brushed on the population drove people to stock up on all kinds of "vital" supplies and cannabis made the cut to that vital grocery list.
Indeed, the cannabis industry received a larger precipitous demand for cannabis products when the CDC announced the need for self-quarantine. The demand for cannabis products was even qualified as essential in some states where medical cannabis stores are remaining in operations. On this, NORML Executive Director Erik Altieri mentioned " The recognition by our government officials that cannabis is indeed not just here to stay, but an essential part of life for millions of Americans -particularly in the patient community- is a welcome move in the right direction." This sudden need for cannabis products even improved the performance of certain cannabis stock like Aphria (NYSE:APHA) and Organigram (NASDAQ:OGI).
In these uncertain times, one thing is sure, the economy is in peril. The nature of this crash is much larger than anything we have seen before. Experts say traditional revenue-boosting strategies like increasing income, sales, or real estate taxes won't work. What they are foreseeing is even worst, those "traditional" strategies might push taxpayers away and weaken the state economy.
Why would all of this mess require cannabis legalization? Data Treck research believes that the pandemic taking over our world could accelerate the state legalization effort. This new hypothesis started in the state of New York.
As you may know, Governor Andrew Cuomo renewed his proposal for cannabis legalization a few weeks ago. He was largely criticized for this last "move" perceived as insensitive and out of place in this time of crisis. His critics begged him to focus on COVID-19 before anything else.
It goes without saying that a lot of cannabis-related bills have been put on hold until further notice across the US nation.
Following this germ spreading disaster, the state of New York is expected to experience a substantial reduction in its annual revenue. Its revenue, more precisely, is estimated to be between $4 billion and $7 billion lower than anticipated.
Jessica Rabe Co-Founder of DataTreck shared "While we recognize legal marijuana is a controversial topic for many people, the budget shortfalls that COVID-19 will create may sway opinions about this issue."
In New York's case, a legal cannabis market could generate over $1 billion in annual tax revenue. The regulation and introduction of this new market have the potential to help support the state and mitigate the impact of the virus on the taxpayers.
Rabe adds "If Colorado can raise +$300 million from recreational and medical marijuana sales in a year, New York can certainly earn over $1 billion as long as the sate taxes and regulates adult-use sales reasonably." Her last comments refer to the major difference between the implementation of legal marijuana in Colorado and California. The approach of Colorado generated much better results in terms of transitioning and sales.
With the affliction of the coronavirus infecting more and more Americans it is hard to tell when our society will be back to normal. It is also arduous to determine how this transition will happen. As for the future of cannabis legalization, 11 states have already done it. The normalization of the plant and the end of prejudice and taboo might help. Although the biggest push for its legalization might be the dent in our economy following this more than chaotic flu season.