Analysts Predict Cannabis Stocks Rise Amidst Corona Outbreak
As Covid-19 slowly conquers the world, an increasing number of people are starting to practice social distancing and self-isolation in fear of transmitting or catching the dreadful Coronavirus.
This practice has already started to negatively impact the world’s economy, but analysts assume that cannabis stocks may actually rise during the Coronavirus outbreak.
Based on a survey conducted in the US and Canada, which included some 1,000 cannabis users and 863 alcohol consumers, cannabis users preferred to consume cannabis in very small, close-knit (private) groups of people, whereas alcohol users preferred much larger gatherings.
MKM Partners analyst, Bill Kirk, claims that the vice of choice for larger groups of people or when meeting someone new is none other than alcohol, whilst the vice of choice when people are alone is cannabis. This has led him to believe that one of the “stay at home” activities during the Covid-19 outbreak will be cannabis consumption, whereas alcohol consumption will decline.
Furthermore, the survey also reveals that 68% of people who consume cannabis said that this was their vice of choice when alone, compared to just 42% of alcohol consumers. Moreover, only 26% of surveyed people stated that they consumed cannabis when in large groups, compared to a whopping 57% of alcohol consumers.
Additionally, Kirk points out that the price of cannabis has fallen, which could potentially attract new consumers, while the price of alcohol has remained the same.
Cannabis stocks were on a downward spiral even before the Coronavirus outbreak, mainly due to the overexpansion of some of the largest cannabis producers. Subsequently, they had to wind down their facilities and lay off staff, resulting in falling stocks.
With thousands of Covid-19 fatalities across the world, countries like China and Italy are already practicing total lockdowns to prevent further spreading of the virus. Combined with the work-from-home economy, the situation has prompted many analysts to believe that this would provide the necessary momentum for the budding cannabis industry.
Cannabis stocks and streaming services aren’t the only ones benefiting from this situation, so to speak. Namely, food ordering and delivery services are also getting a considerable boost. Staying away from crowded restaurants has benefited services like Grubhub, for instance, provided that there are no city-wide quarantines, like those in China, of course.
Still, these are merely predictions; nothing is certain yet. It remains to be seen what the future holds for the global economy and the cannabis industry, in general, in the post-Covid-19 era.