53% of US adults agreed with the decision that marijuana and marijuana products should be considered an essential good.
Some states in America are pro-cannabis, however, the federal government is not. They excluded and marijuana companies from the $2 trillion economic stimulus bill.
Vice President of Canopy Growth Corp David Culver argued that cannabis companies were in need of the same economic relief that other industries were offered.
However, despite the lack of support, the cannabis companies are seemingly blooming through the coronavirus crisis. Most stocks have improved significantly, as sales hit record highs during the outbreak.
Many companies like Leafly to the Flowr Corporation have been firing employees by the hundreds, but no one is sure as to whether this is a result of the COVID-19 outbreak, or simply due to poor management decisions that are only coming into view now.
Several dispensaries around the US have reported large sales increases, so it is a bit of conundrum as to who is really struggling. However, one thing is for sure and that is that the employees laid off during the crisis will undoubtedly be the ones to suffer the most.
Despite the outbreak, cannabis stocks have had a strong week on the exchange markets.
- ETFMG Alternative Harvest ETF (NYSE: MJ) gained 24.7%.
- AdvisorShares Pure Cannabis ETF (NYSE: YOLO) rose 23.2%.
- Cannabis ETF (NYSE: THCX) spiked 28.3 %.
- Amplify Seymour Cannabis ETF (NYSE: CNBS) traded up 22.2%.
- SPDR S&P 500 ETF Trust (NYSE: SPY) closed the period up 10.75%.
Tilray Inc, a Canadian cannabis company had an especially good week, closing 150% up, and Aurora Cannabis Inc posted gains of more than 41%.
The reasons for these incredible gains are not totally clear, however, sources point toward a sector rebound, wider economic recovery and speculation that states may accelerate legalization as a means of recouping economic losses over the time of the pandemic outbreak.
In other news for the week, Endocanna Health announced the creation of their Scientific Board, which will assist the company in getting involved in endocannabinoid and genomics research while also helping to drive investment for clinical trials and research,
The board was formed to help look at the role of plant medicine and modern therapeutics in the realm of genomics.
A $99 million merger between Charlotte’s Web Holdings Inc and Abacus Health Products Inc was agreed to as well. The former reported a $1.3 million increase in turnover over the last financial year.
The marijuana industry looks to be one that will be able to withstand the pandemic if states continue to be on board with it being deemed an essential good, and perhaps the federal government will see the benefit of the cannabis industry being able to stimulate the economy during this crisis.