Sales of cannabis soared last year, particularly in the first half, as the Coronavirus caused a worldwide epidemic. As compared to recent years, Washington state’s revenue from Cannabis grew by 9%. Sales in California increased by 53 percent year over year (while it had grown by 75 percent in the prior three months). Revenue for Oregon reached a record $84.5 million in the end of first quarter, up from $61.2 million a year earlier.
The cannabis industry was in a state of flux, with sales soaring but also fluctuating. Recently, a marijuana cultivator in California conducted a nationwide survey that identified three reasons why demand is rising.
In order to determine if this is likely to be a trend that will continue, and to understand the value of investing in cannabis stocks today, let’s examine the factors driving increased cannabis sales.
Cannabis As A Form Of Boredom Relief During Community Quarantine
A survey revealed that 37% of respondents consumed pot to deal with boredom, which came as a surprise to some. New Frontier Data did not provide this result, so it would have to be a result of people living in isolation thanks to the pandemic and trying to find ways to fill their time.
Anxiety And Stress Are Handled Well By Cannabis
It isn’t uncommon for users to use weed to reduce stress. About 40 percent of marijuana users reported that they used more pot during the pandemic, and 74% cited stress and anxiety as the main reasons for their current marijuana consumption. There is no question why anxiety and stress levels are high due to news stations running alarming headlines and consumers concerned pot supplies might become scarce.
As a result of an identical survey conducted in 2017, New Frontier Data discovered 50% of people who used Cannabis did so for relaxation. The stress and anxiety indices did not rank far behind, at 39% and 40%, respectively. The study does suggest that cannabis use is most often motivated by a desire to relax or relieve stress. In addition to that, the situation is reasonable since stress levels have increased since the pandemic began.
There Is A Cannabis Shortage Concerning Consumers
One of the main concerns among those surveyed is the possibility of a cannabis shortage as a result of the pandemic. A full 35% of respondents said this was their most pressing concern. These findings are backed up by point-of-sale data from Headset, a company that tracks cannabis sales across several states. Consumers started stockpiling their Cannabis supplies mid-March, a couple of days after the World Health Organization declared an alert. However, cannabis sales from seed banks like Homegrown Cannabis Co. surged in most US States before falling within the following weeks.
Can The Cannabis Industry Be Affected By These Changes?
Investors shouldn’t read too much into short-term trends since the issue has been a political pandemic for the last few months. Based on sales data, as well as the survey results, it appears consumers are making more sporadic large purchases. In the coming years, consumers will become more affected by job losses and financial challenges.
In the absence of a forecast for the third quarter, there is no mention of the pandemic. Given how volatile the sales have been over the past month, it’s not surprising.
The pandemic will allow investors to better gauge how it may impact the economy and the industry. As the economy and the industry are affected, consumers will have begun to adjust. However most of them are turning to homegrown weed supply, mostly from https://homegrowncannabisco.com/feminized-seeds. When investors become aware of how important cannabis is, they will begin to step up their investments. Harvest Health’s first-quarter results will likely look good, but the key question is how the second quarter will unfold.
Pot stocks aren’t a good investment right now because there are many question marks within the cannabis industry. A minimum of another month could be needed for Cannabis investors to establish the extent of the sales and whether the demand for Cannabis will be able to survive the current economic conditions.