Coronavirus Crisis To Speed Up Cannabis Product Legalization, According To US CEOs

The chances for the legalization of federal marijuana have increased dramatically in the wake of the COVID-19 crisis. This was revealed by U.S. cannabis CEOs in an interview with CNBC after several states have declared dispensaries as essential businesses.

Exempted From Stay-At-Home Orders

Several U.S. states have allowed marijuana dispensaries to remain open, declaring them essential businesses, in the light of stay-at-home orders issued by the states’ respective top officials. These include California, Washington State, Nevada, and Colorado.

CEOs of U.S. based cannabis manufacturers Green Thumb Industries, Cresco Labs, and Curaleaf, along with cannabis investor Matt Hawkins spoke to CNBC in an interview about the latest developments. They told CNBC the state of the cannabis industry ahead of the unofficial holiday, April 20 or 4/20, for users of recreational cannabis.

A Peek Into The Future

Charlie Bachtell said that when Americans can finally lift their heads from the COVID crisis, everyone is going to face a situation where many jobs are gone. Bachtell is the CEO of Cresco Labs. He also said that by that time, a lot of economic development impact might have already disappeared. “How are we going to bring that back? I think cannabis has to be part of that discussion,” Bachtell said.

According to Cowen & Co., an investment bank that provided research coverage of the emerging cannabis industry, the cannabis market in the U.S. is now worth around $56 billion, with 90% of its sales happening in the illegal market and goes untaxed. Boris Jordan, the executive chairman for Curaleaf, gave his insight on the matter. He said that right after the Great Depression, one of the federal government’s programs was to concentrate on revenue generation.

Jordan also said that the federal government lifted the prohibition on alcohol and started to subject it to tax. It became a major source of revenue for both federal and local governments in the United States. He also said governments would be searching for ways on how to generate revenue, like what happened in the months following the Great Depression, and according to Jordan, cannabis “is a significant revenue generator.”

Essential Businesses

As the COVID-19 pandemic caused many U.S. businesses to almost stop their operations in March, cannabis dispensaries have been deemed essential in several U.S. states where adult use is legal. Cowen observed that marijuana sales have surged with California, Colorado, Nevada, and Washington State reporting sales of around $134 million.

This shows an increase of 17% from their weekly average in the same period last year. Its average sales in the second half of March also rose by 47%. According to Matt Hawkins, a cannabis investor, this data makes for a good case for its legalization. “You can just point to the fact that we have been deemed essential, why are we not legal?” Hawkins asked.

For Green Thumb Industries CEO Ben Kovler, the COVID-19 crisis has put the cannabis industry in a different light. He predicts more states may start legalizing marijuana use as a consequence, which may also be considered by the federal government. “The great American experiment will become more real as the federal government sees what’s happening at the states,” said Kovler.