Has COVID Kept California Cannabis Businesses Alive? Yes, and Here’s Why
Despite many in the California cannabis industry predictions stating many companies would be out of business by the end of 2020, many cannabusinesses are thriving. Even with the market’s harsh business conditions and a scarcity of investors, this industry is still pushing.
Towards the end of 2019, many believed the cannabis industry in California couldn’t last. Profits had barely existed in the legal market since its 2018 launch, and many were expecting the market to contract.
Even with the doubt, California still remains the country’s largest cannabis market. Instead of failing, the industry is in motion. But why?
During the pandemic, the cannabis industry was deemed “essential.” Rather than forcing dispensary doors shut, those doors were kept wide open, allowing many to purchase their medicinal and recreational cannabis throughout the coronavirus pandemic.
Let’s not forget about the federal stimulus payments. Even while people were unemployed, cannabis sales remained steady as unemployed workers continued receiving $600 per week from the government.
As the cannabis industry thrived, businesses and investors further invested in it. They saw the potential and threw more money into the sector to float it through the year.
In fact, Seattle-based Headset, a cannabis industry data analytics firm, claims California’s legal cannabis market is having one of its best years. In July alone, California had a record sales month and sold $348 million worth of recreational cannabis.
March was also an excellent month for California cannabis. Retailers sold nearly $332 million in cannabis.
In 2019, the best sales month for cannabis in Cali was just $309 million. If we rewind to December, we see the best month was only $159 million.
Active cannabis business licenses are up in almost every category in 2020. The only sector that shrunk was manufacturer licenses, and this was only a slight decrease.
Is it safe to say COVID has been kind to the cannabis industry? Yes, and we can expect this sector to continue thriving long after the pandemic ends.