As COVID-19 is reshaping everything else, so it’s changing the way people buy legal REC in Ontario. Jameson Berkow, editor-in-chief of new cannabis publication The Rise, pondered the 30% of new customers ordering from the Ontario Cannabis Stores and guessed hopefully they’d been won over from the legacy market due to its reliance on potentially COVID contaminated cash.
- Other analysts suspect COVID may make legacy consumers uneasy enough about health concerns to shift to the legal market. Meanwhile, they note, isolation is likely to increase REC consumption.
US conservative magazine The National Interest reported “Canada Only Has Good News to Share After Legalizing Marijuana,” noting evidence has disproven nearly all arguments for prohibition.
The National Interest
Some analysts believe cannabis will be less likely than other sectors to suffer as hard in the economic aftermath of the pandemic.
There’s also bad news:
- MJ Biz analyst Craig Behnke said the COVID-related economic crisis is “going to be an extinction-level event for some companies.”
- Canadian companies still have average inflated valuations of 5x sales and 11.3x EBITDA, meaning they have room to continue falling.
- The collective 80% decline in cannabis stocks over the past 12 months means more bankruptcies will be coming, analysts predict. After that, we can expect consolidations.
Prince Edward Island reported since they closed all cannabis stores, sales via crown retail monopoly P.E.I. Cannabis’s online portal have declined to roughly 30% to 35% of the crown corporation’s usual revenue.
- Brock University professor Michael J. Armstrong noted the province’s annual cannabis report found 98.5% of pre-pandemic sales were through physical stores, and guessed the 65% to 70% of normal buyers no longer buying from P.E.I. cannabis have returned to the legacy market.