The coronavirus pandemic may have negatively impacted many across the world, but what it also has done is show us how much demand cannabis has.
According to US cannabis CEOs, the coronavirus crisis will speed up legalization. Eight states had deemed recreational marijuana as essential during the coronavirus shutdowns.
Cowen reported that weekly sales last month had topped $134M in California, Washington, Nevada, and Colorado. This was a 17% increase from the weekly average in March of 2019.
According to Cowen, the U.S. cannabis market is worth approximately $56 billion this year with about 90% of sales going untaxed in the illegal market.
In an interview with CNBC, the CEOs of major cannabis producers Cresco Labs, Green Thumb Industries, and Curaleaf, as well as cannabis investor Matt Hawkins, had said the coronavirus could speed legalization up.
“When we all start to be able to lift our heads from this Covid experience, we are going to be faced with a scenario where a lot of jobs have gone away, a lot of economic development impact has disappeared,” said Charlie Bachtell, CEO of Cresco Labs. “How are we going to bring that back? I think cannabis has to be part of that discussion.”
“One of the programs by the federal government right after the Great Depression was to focus on tax revenue generation,” said Curaleaf Executive Chairman Boris Jordan.
“They lifted prohibition on alcohol and therefore started to tax it — and it became a major revenue generator for both the federal and the local governments around the country.”
According to Jordan, governments will be looking for ways to generate revenue, as was the case after the Great Depression, and cannabis “is a significant revenue generator.”
“You can just point to the fact that we have been deemed essential, why are we not legal?” said Hawkins, the managing partner of Entourage Capital. “There is going to be a need for increased tax revenue and where else to look but at a legalized industry like cannabis, that is one of the few growth sectors in the world right now.”
Ben Kovler, CEO of Green Thumb Industries said, “The great American experiment will become more real as the federal government sees what’s happening at the states.”
“To stand up a brand new consumer product business that big, people don’t understand that yet,” said Kovler. “Literally $300 to $500 million dollars in capital expenditure in Illinois alone to build the facilities — lots of labor, lots of steel and concrete, HVACs, jobs, massive real estate demand. It’s a big, big industry.”
