COVID-19 is impacting the global economy in unforeseen ways. The economic impact of the virus has left no industry unaffected, and stakeholders in the cannabis niche may be wondering what the current outlook entails for them.
Fortunately, the legal cannabis industry has exhibited its resilience in uncertain times. The industry’s ability to remain versatile throughout the pandemic is a clear sign that legal cannabis businesses are here to stay.
If you’re wondering how COVID-19 is changing cannabis, some promising signs point towards a bright future for the legal cannabis world.
Legal Cannabis is Essential
One of the most challenging components of the shutdown for small businesses is the ability to remain open. While many industries were forced to shut their doors by local officials, the medical cannabis industry experienced a strong appreciation from local lawmakers. Most states with legalized medical marijuana categorized distributors as “essential” businesses.
This meant that medical marijuana dispensaries were able to serve their customers throughout the shutdown. Many cannabis businesses enacted safeguards to protect staff members and customers, including mobile pickup solutions and other contactless purchasing methods.
In many cases, recreational cannabis stores like Cannabis & Glass in Spokane were also deemed “essential.” While this was excellent news for cannabis business owners, it has a much larger significance for the cannabis industry as a whole. As lawmakers deem cannabis as an essential industry, it proves that the niche is becoming a respected part of the American economy.
Many cannabis industry stakeholders have spent years trying to legitimize cannabis. The attitude towards the industry throughout the pandemic is proof that the hard work is paying off. This could lead to increasingly favorable regulation in the future.
Credit Card Processing Dilemmas
One way that COVID-19 has impacted the entire economy is an increase in credit card processing. As hand-to-hand contact with cash payments is now considered a potential method of infection, businesses are doing their best to encourage credit card payments. Consumers have been prioritizing using contactless payment methods and other digital payment solutions to pay for goods and services.
Unfortunately, the cannabis industry can’t upgrade their payment options. As cannabis is not legal on a federal level, many payment processing platforms and banks are banned from providing merchant services to cannabis businesses. This means that cannabis companies must be more creative with their payment options.
The SAFE Banking Act aims to rectify this problem. While it has yet to pass the US House, efforts to streamline the process may mean the problem is solved in the coming months. This is another element that could prove crucial for the cannabis industry.
While COVID-19 is undoubtedly a challenge for the cannabis industry, there are plenty of promising indicators for stakeholders in the industry. While overall consumer demand for goods and services may drop, the actual sales data in the cannabis industry has shown that many consumers consider this an essential product. As regulators have also responded well to the cannabis industry during COVID-19, the future looks bright for this up-and-coming niche.