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Is Marijuana 'recession-proof?' Industry Experts Say Yes

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Is marijuana ‘recession-proof?’ Industry experts say yes – to a point – and alcohol might be a guide

Published 7 hours ago | By John Schroyer and Bart Schaneman

The legal cannabis industry appears poised to enter uncharted waters: an economy engulfed by a full-fledged recession.

The coronavirus is inflicting severe damage to the world economy, raising the specter of a major economic contraction, and some economy watchers – including Bank of America – have already asserted the U.S. is in a recession.

How would legal cannabis companies hold up in a severe downturn? Fairly well, said several industry experts.

And alcohol sales might be a good barometer.

Industry experts note that most cannabis consumers are wedded just as closely to marijuana as they are to other essentials, ranging from pharmaceutical medicines to toilet paper and – perhaps a closer industry parallel – alcohol. The accompanying chart shows that alcohol sales at the wholesale level held up relatively well during the Great Recession that stretched from December 2007 to June 2009.

And, over the longer term, sales increased.

The connection between cannabis and alcohol

Former Sacramento, California, cannabis regulator Joe Devlin, now senior vice president with Ikänik Farms, based in the state’s capital city, went so far as to say he believes the marijuana industry is “relatively recession-proof” because MJ has fallen into the same category as spirits and tobacco: It’s a relaxation vehicle and reward that consumers give themselves.

And it’s not something they’re likely to cut out of their budgets.

Source: https://mjbizdaily.com/is-marijuana-recession-proof-industry-experts-say-yes-to-a-point-and-alcohol-may-be-guide/

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