However, despite demand not slowing down and the increasing acceptance of cannabis use, the American marijuana industry as a whole has faced a downturn. Some, such as Acreage Holdings and 4Front Ventures have furloughed employees and terminated acquisitions, citing the significant impact of the COVID-19 pandemic. Marijuana stocks have also dipped down some, though they have generally done better than much of the rest of the market.
COVID-19 has also stymied legalization efforts as state and federal legislators have turned their attentions to the response to the public health and economic fallout from the pandemic. For example, recreational marijuana legislation in New York has been temporarily tabled for now. Cannabis businesses also face additional issues in keeping afloat in that they have typically faced challenges in acquiring banking services. Cannabis businesses also are ineligible to receive aid from the $2 trillion pandemic relief package and similar financial bills passed recently, due to the current status of cannabis remaining illegal under federal law.
Despite these setbacks to the cannabis industry, the COVID-19 pandemic has also sparked some glimmers of hope. In 27 states that have implemented stay-at-home orders, marijuana businesses have been allowed to remain open. Many of these states have deemed cannabis businesses as providing “essential” services (along with gun and liquor stores), such as Florida, Iowa, Louisiana and California. Some representatives have also introduced bills to make legal cannabis businesses eligible for the federal coronavirus relief funds available to small businesses, and others have supported provisions in the next COVID-19 relief bill to increase banking access for marijuana companies.
Months into the COVID-19 pandemic, it is apparent that COVID-19 poses potential hurdles for the nascent cannabis industry and may very well slow recent ascent. However, the pandemic has also highlighted how there is great consumer demand and political pressure at both the state and federal levels for cannabis-related businesses to remain in business. After all this is over, it is likely that the cannabis industry will enjoy increased opportunities and perhaps even legislative changes.
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