2020 hasn’t been kind to the economy. Last month saw the biggest fall in U.S. stocks since 1987, and analysts insist that the country is almost certainly headed toward a recession. However, one industry that has been able to weather the storm is cannabis.
With most industries shut as part of the coronavirus response, cannabis was lucky enough to be deemed essential. In fact, experts have stated that the sector may even be recession-proof. For investors looking for safer stock options, cannabis, especially medical marijuana, poses an attractive option. Here’s why:
Medical marijuana is essential, and cannabis dispensaries are still allowed to conduct business during the lockdown, provided they exercise caution. States that allow marijuana have even taken extra steps to ensure the sector keeps running as safely and smoothly as possible, such as allowing curbside pickups and home deliveries. Some governors have excluded recreational marijuana from this category, though.
With over 200 million medical marijuana patients in the country, the industry will be sure of steady demand. And with fears of looming drug shortages, the industry may see an influx of even more patients. Philadelphia, for instance, is seeing a surge of new patients, with doctors at the Sanctuary Wellness Institute Fielding approximately 300 calls daily from prospective patients.
Medical marijuana is legal in more territories. Cannabis has admittedly come far from the days of prohibition, but there’s still a long way to go. In the U.S., 30 states permit medical marijuana while only 11 allow recreational marijuana. And apart from Canada and Uruguay, no other country has legalized recreational marijuana.
While there are plenty of marijuana legalization campaigns, it will be years before recreational cannabis is legal at the federal level.
Medical marijuana, on the other hand, is a lot more accepted and has a much wider market, making it a safer investment. And with more research into marijuana’s efficacy as an alternative natural medicine are conducted, you can be sure the consumer base will increase.
Medical marijuana stocks are less volatile. High risk, high reward, right? That works in many instances, but in the case of recreational marijuana, the risk is too great. The more scientific data about the efficacy of medical marijuana there is, the greater the confidence in the industry, resulting in sustained long term sales. Look at GW Pharmaceuticals, for instance.
The UK firm manufactures and sells Epidiolex, an FDA approved CBD-based drug that’s used to treat two rare and severe forms of pediatric epilepsy. Even during this volatile period, the company’s stocks have remained relatively stable, compared to recreational marijuana companies.
It would be interesting to hear what sector players like The Supreme Cannabis Company Inc. (TSX: FIRE) (OTCQX: SPRWF) have to say about the ways through which the long-term prospects of recreational marijuana can be brought in tandem with those of medical cannabis.
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CNW420 spotlights the latest developments in the rapidly evolving cannabis industry through the release of two informative articles each business day. Our concise, informative content serves as a gateway for investors interested in the legalized cannabis sector and provides updates on how regulatory developments may impact financial markets. Articles are released each business day at 4:20 a.m. and 4:20 p.m. Eastern – our tribute to the time synonymous with cannabis culture. If marijuana and the burgeoning industry surrounding it are on your radar, CNW420 is for you! Check back daily to stay up-to-date on the latest milestones in the fast -changing world of cannabis.
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