Just a couple of years back, analysts were predicting tough times for the cannabis industry as cash and financing were rapidly drying up. Then the pandemic came, and sales skyrocketed. Now, there’s yet another huge catalyst.
As the pandemic is easing with the coronavirus vaccine rolling out, the cannabis industry might get another boost.
In a joint statement, three top Senate Democrats announced a push to pass sweeping legislation this year that would end the federal prohibition on marijuana on a Federal level.
Senate Majority Leader Chuck Schumer, Senator Cory Booker of New Jersey and Ron Wyden of Oregon said they would release a draft on “how best to legalize and regulate cannabis and cannabis commerce in a post-prohibition America”. The Senators stressed that passing the legislation would be a priority for the Senate.
No details were immediately available, but three Democrats said that in the next few weeks, they will release a proposal for legalization that would include measures to “protect public health” as well as “responsible taxes and regulations.”
The reform would also provide so-called restorative justice for people who have been convicted of pot-related crimes.
“As states continue to legalize marijuana, we must also enact measures that will lift up people who were unfairly targeted in the War on Drugs,” the Senators wrote.
In the U.S., 68% of Americans currently favor legalizing marijuana, a record high, while the legal cannabis industry market topped $13.5 billion in 2019 and reached $19.7 billion last year.
In its new study, New Frontier Data projects that cannabis sales in the U.S. are projected to reach $35 billion by 2025.
Fifteen states and Washington, D.C., have now legalized marijuana for recreational use for adults over 21. Thirty-four states currently allow medical marijuana use, while 15 states do not have any laws that allow marijuana.
A few other states were also preparing the legalization for last year; however, the pandemic consumed bureaucratic attention and social distancing has hindered any ballot drives.
Ever since the start of the pandemic, due to various lockdowns and stay-at-home orders, sales of cannabis products have surged as the industry was deemed an “essential service.”
Sales also boomed during the holiday seasons.
Jane Technologies, an online cannabis marketplace, registered a 241% increase in online sales on Green Wednesday 2020, compared to the previous year. Overall, 2020 online sales increased by an average of 271% compared to 2019.
According to Green Entrepreneur, companies sold $400 million worth of cannabis products in the week leading up to July 4th 2020--a 60% increase compared to the weekly average.
Labor Day is also a big day in the cannabis industry, with sales exceeding a quarter-billion dollars in 2020, representing a year-over-year increase of 23%. The Christmas holiday period also outperformed expectations and generated $427 million.
Now, all eyes will be on how cannabis stocks might be able to ride these Biden Administration tailwinds.
By Michael Kern for Safehaven.com