Where are you from?
As data for cannabis product sales in March continues to roll in, it was revealed that "A survey of 2,500 consumers by Cowen & Co. found that 33% had tried cannabis at some point in their lives, a record high" (1).
" legal pot appears to be a more "habitual" purchase than a one-time novelty"
Large Uptick In Sales Shows Sustained Strength
As people continue to stay indoors for extended periods of time and are unable to visit bars or pubs, it appears that many are exploring recreational products outside of alcohol. This week the OCS reported that sales had jumped by over 600%, with data showing that "... legal pot appears to be a more "habitual" purchase than a one-time novelty," (2). During the first half of March, daily orders at the OCS averaged at around 2000 orders a day, and have now steadied at around 9000 in mid April, which is almost 5 times what it was prior to the pandemic. The interesting thing to note is that "More than one-third of all orders are classified as new OCS customers, the data showed." (2). As the perception of cannabis continues to change across North America, strong sales data combined with higher sales volume from new customers indicates that "... a lot of people think cannabis is just another consumer good, like beer or wine" (3). The kind of consumer behavior we are witnessing leads us to believe that this pandemic will be a use case for cannabis as a 'recession proof' industry, similar to alcohol and tobacco: "... MKM Partners analyst Bill Kirk published a survey suggesting cannabis is among the most resilient discretionary spending category for U.S. consumers as a result of COVID-19." (2)
Conclusion
With an increase in sales volume, it seems that the issues from oversupply are going to be subsided which was a major problem for the industry towards the end of 2019. The industry which has been in decline for over a year now looks to finally catch a break in the most unusual of circumstances where just about every other sector is seeing declines in sales.
About The Author
I am an electrical engineering graduate from Carleton University, and have always had a keen interest in investing. I have been following events as they unfold in the cannabis space in Canada since 2017 and have always had the opinion that decriminalization is the way to go as it reduces drug related crime and can be monetized as a source of tax revenue for the government. My goal is to help people who invest in a risky space like cannabis understand what to look for, as the amount of information available is often overwhelming for new investors. Aside from that, there are several companies all competing with each other to get your investment dollars!
References
- Pot Use Reached All-Time High in March Amid Lockdown Measures
- Ontario online pot purchases jump 600% amid COVID-19 pandemic, data shows
- Marijuana use and sales spike during coronavirus lockdown measures: Poll
