"Cannabis industry planning for opportunities in a post COVID-19 world"

While we all try to adjust to telecommuting and having our business routines upended, there are a few “lights at the end of the tunnel” we need to keep in mind. According to a CNBC/Goldman Sachs research study, there have been 26 stock market corrections since World War II that have taken four months to bottom out and the recoveries have taken on the average of about four months to get back to even.

In short, the sky is not falling. Joseph Davidsohn is CEO of the Las Vegas-based Qanvus Group, a management consulting group that focuses on the cannabis and hemp industry. Joseph addressed the industry’s short term and long-term prospects.  

“There are going to be incredible buying opportunities in this industry when the dust settles because the companies that have navigated this crisis will be looking to expand.”

Sales are up
Martin Glass, a corporate lawyer who has been involved with major transactions with leading Canadian & U.S. companies sees the current situation in a different light.

“Business is good and from what I hear, sales appear to be up. The fact that in many jurisdictions, health departments are affirming that dispensaries are an essential business is critical. Some states, such as New York, are relaxing regulations regarding delivery services.”

Ranson Shepherd, is the co-founder of Virtue and he works with a number of dispensaries in Nevada. If any place would be suffering, it would be Las Vegas where so much of the economy is based on tourism dollars. 

“The demand increase has been staggering here in Las Vegas since the Governor’s announcement earlier this week. In the last week alone, we have seen a minimum of 50% increase in some areas we where we operate, and others as high as a 70% increase.”

What about growers
These are three different perspectives from people involved in entirely different segments of the overall cannabis industry. What about the growers, the people who are on the production side? Are they seeing a drop-off?

Jake Hill, CEO of Grow Automations in Eugene Oregon offered his opinion. “From our perspective, it seems the small niche market where you have craft growers and retailers that have literally “grown” with the market rather than going all-in on one major project, they are highly succeeding.”

In the long-term
The bigger question, the one everyone is asking, relates to the future of the industry. In the longer term, is the future brighter and if so, why? Given some of the dips in valuations of cannabis stocks, some people might disagree.

“Look, I’m not touching stock tips but keep in mind for example, that we’re just beginning to assess the potential impact of hemp,” Mr. Davidsohn offered. “It has so many by-products. Patagonia even has a hemp clothing line.”

Focusing for a moment on the cannabis industry itself, in a much longer discussion, Mr. Glass volunteered his perspective as one who has worked very closely with many of the largest companies in the industry.

“Within five years we will have clarified the whole state/federal legality issue. By that point, there will be a lot of consolidation in the industry. I think some of the larger consumer packaging companies will have an interest in qualified companies, especially the ones who are doing well.”

Assuming that both of these experts are correct, the planning for the next three to five years is taking place irrespective of the impact of Covid 19 and the temporary disruption to the U.S. economy. Companies don’t survive and thrive by looking at where they are today. The airline industry isn’t selling its planes for scrap metal, it’s merely waiting until the opportune time to resume normal operations. So far, the cannabis industry isn’t even in a pause mode.

Let’s give the last word on what the future of the industry will look like to Mr. Hill.

“Efficiency is the future and will be absolutely crucial for the future stability of cannabis companies. As an example, there will be large mandates on the type of equipment that can and cannot be used because grow facilities have major carbon footprints. Regulation change on power use is coming. It is best for larger companies and even the small market companies to prepare now by implementing every efficiency standard that can be done.”

The smart executives are retooling their game plans in the short term and are remaining laser-focused on the future expansion of the industry.  

For more information:
iUNU
Carl Silverberg
Sr. VP Outreach & Public Affairs
202 320 9797
csilverberg@iunu.com  
iunu.com    


Publication date:
© /



Receive the daily newsletter in your email for free | Click here


Other news in this sector:


© MMJDaily.com 2020

Sign up for our daily Newsletter and stay up to date with all the latest news!

Subscribe I am already a subscriber