3 Ways the Cannabis Industry Will Come Out Stronger From The Coronavirus Pandemic

If 2019 was a tough year for the cannabis industry, 2020 could be downright catastrophic. However, as bad as things look today, the industry may get stronger as a result of the coronavirus pandemic. Whether it’s changes to how people view cannabis or to there just being a smaller playing field, there are some subtle and significant changes that could make the industry look a whole lot different in a year or two.

Here are three ways the marijuana industry may…

actually get stronger as a result of the coronavirus pandemic.

1. More patients turning to cannabis

Many states throughout the country have allowed cannabis businesses to remain operating during the coronavirus pandemic. And for patients who may be hesitant to try treatment for pain relief, anxiety, or other possible symptoms, it could lead to some new users giving cannabis a shot. Many hospitals are overloaded with patients, and according to the Food and Drug Administration, there are dozens of drug shortages right now.

With fewer options to relieve pain or to treat ailments, using cannabis may become a more attractive option for patients who don’t want to wait until a drug is available. It effectively gives cannabis the opportunity to help fill the gap, and if it’s successful, it could lead to some new long-term customers for the industry. That can go a long way in not only helping with the industry’s growth and with acceptance of cannabis as a medical treatment, but it can also help rally support for legalization in states where pot remains illegal and where skepticism of it remains high.

2. Getting rid of the pretenders

It’s going to take a lot for cannabis companies to survive 2020, and it’ll be a big test that many won’t pass. But the companies that don’t make it out this year likely would’ve been bad investments to begin with. And the problem is that sometimes those few bad apples can weigh down the industry, as scandals and bad press can sink not just the individual equities affected, but the industry as a whole.

This doesn’t mean that every cannabis stock that’s still around in 2021 or after the pandemic is over is a good buy. But narrowing the field will get rid of many of the bad stocks in the industry that are only likely to fall in value, anyway. Take a stock like Aphria (NYSE:APHA), for example. It’s reported a profit in three of its past five quarters. And while it’s gotten an occasional bump up from a strong earnings report, the problem is that the industry continues to weigh down the stock.

In 12 months, shares of Aphria are down more than 68%, not far from the 75% decline that the Horizons Marijuana Life Sciences ETF has gone on during that time. Aphria’s been following the path of an average cannabis stock, even though it’s been among the better-performing ones in the industry. Investors lump it in with many other cannabis stocks, including those that may not be able to get through the coronavirus pandemic. That’s where getting rid of some of these under-performing pot stocks can help improve the industry’s reputation and the perception that investors have of it.

3. Are delivery and curbside pickup here to stay?

One way that states have encouraged social distancing while allowing marijuana dispensaries to stay open is by allowing them to…

Continue reading at THE MOTLEY FOOL