Saturday, April 20, 2024

5 Key Questions Regarding The Weed Industry And Another Possible COVID Shutdown

Like all industries, a new shutdown will kill any job growth or worker training going on all over the country, including in the cannabis industry.

This article originally appeared on and has been reposted with permission.

The world is full of worry again today as a new COVID strain, referred to as Omicron, has the World Health Organization (WHO) worried and travel restrictions in several countries are once again in place. As CNBC summarized the recent WHO health announcement on the new COVID strain:

The World Health Organization on Friday assigned the Greek letter omicron to a newly identified Covid variant in South Africa.The U.N. health agency recognized the strain, first referred to as lineage B.1.1.529, as a variant of concern.

Did Marijuana Prohibition Cause The COVID-19 Pandemic?
Photo by Fiordaliso/Getty Images

Health experts are deeply concerned about the transmissibility of the omicron variant given that it has an unusual constellation of mutations and a profile that is different from other variants of concern.

“Omicron, B.1.1.529, is named as a variant of concern because it has some concerning properties,” Maria Van Kerkhove, the WHO’s technical lead on Covid-19, said in a video published on Twitter. “This variant has a large number of mutations, and some of these mutations have some worrying characteristics.”

In a true silver linings story, marijuana legalization and technology innovation boomed during the first COVID-19 shutdowns. Many states declared cannabis an “essential item” much like alcohol, and that allowed for massive advancements in curbside pickups, online ordering, and even delivery services in many areas.

Many states advanced cannabis legalization at a quicker pace than would have been seen without a COVID pandemic, and many people tried cannabis for the first time during the pandemic months. But what about a second shutdown or a more serious restrictive set up than we have now? What if Omicron causes a second “stay home” agenda in some states?

Let’s look at 5 questions regarding Omicron and the marijuana industry and see what happens if this variant becomes a serious threat to the economic recovery underway.

Does a serious COVID variant like Omicron help or hurt the cannabis industry?

The first COVID waves greatly helped the cannabis industry, or at least vaulted legalization, technology, and customer market share light years forward after cannabis was deemed an “essential item”.  A second shutdown wave, while hurting current aspects of the marijuana industry that is dealing with the same problems as non-cannabis companies, would probably actually help it as a whole.

RELATED: How Supply Chain Problems Have Impacted The Cannabis Industry

While cannabis companies can’t get enough workers and have supply chain issues just like everyone else, a second shutdown— and the massive bills that would come with relief payments — would only increase the pressure on the federal government to find new sources of tax revenue and jobs.

If you think the first financial drain was bad on state coffers and budgets, wait until you see what a second round of stimulus checks and COVID relief would do to state’s rainy day funds. At some point, bills have to be paid, and the greater the debt becomes, the more pressure there is to find new tax revenue and create new jobs.

Photo by Towfiqu barbhuiya via Unsplash

The cannabis industry would be prime picking for federal legalization not only for tax revenue, but for job creation going forward. Same story as before, just states are deeper and debt the Federal government would be more desperate to create tax revenue and jobs.

Would an Omicron shutdown help or hurt legalization efforts at the federal level?

Sad to say but another serious COVID outbreak would help legalization efforts if the first two years of COVID offer any clues.  Not only are taxation and job creation important as mentioned in one, but technology advances would almost certainly come if people have to “stay in place”.

RELATED: US Cannabis Industry ‘Flourishing’ In Spite Of (Or Because Of?) General Economic Downturn

Delivery apps, online ordering, and dare to say it, putting cannabis in the mail and shipping it to people’s houses so they don’t go out, could be some sort of emergency agreement between legal states and federal government. Is it probable? No, but is it out the question if the federal government wants to keep people as spaced out as they can for a few months? Sure. That would open Federal legalization up to almost a moot point once THC can cross a state line and be shipped by UPS, Fed Ex, and the USPS.

Would Omicron force more research into the medical benefits of cannabis in relation to the COVID virus?

Yes and no. While most research shows cannabis can help deal with the side effects of a COVID society, such as stress, anxiety, and sleep issues, there is no “magic-bullet study” that shows cannabis is a major factor in fighting or decreasing the viruses’ potency or virality. For example, cannabis does not cure or stop the COVID-10 virus from infecting a person. As more people turn to cannabis instead of alcohol, more research will have to investigate how cannabis is helping or hurting COVID patients. Dr. Kovelchuk’s study on how cannabis can inhibit the “cellular doorways” the COVID-19 virus needs to spread, the subject itself will need more research and peer review.

How would an Omicron spike be bad for the marijuana industry?

Like all industries, a new shutdown will kill any job growth or worker training going on all over the country, including in the cannabis industry. Growers and processors would be in dire of need of workers in order to get products to the dispensary.

Transportation issues already plaguing companies like Amazon and Fed Ex, would also hit the cannabis industry as well, as the need for drivers of all kinds has created fierce demand right now from companies such as the USPS and Fed Ex, to delivery services like Uber Eats and Lyft.

amazon delivery vans
Photo by Bruce Bennett/Getty Images

While workers in the cannabis industry may be deemed essential, the industry would face the same challenges as other essential service providers, like getting and keeping employees during a pandemic.

What would be the ultimate best-case scenario for the cannabis industry in a new Omicron shutdown?

Wild as it may sound right now, cannabis is deemed an essential item, and massive supply chain problems force the federal government to de facto legalize weed. Permits allow for Amazon to list local providers and dispensaries as storefronts on Amazon’s website and ship products through the mail.

While the industry may cringe hearing that, Amazon has the delivery infrastructure and knowhow to actually be able to set it up and pull it off in a short amount of time. Dispensaries could have storefront on Amazon just like all the other businesses on Amazon, and the Amazon network of 2,500 DSPs, or delivery service providers, who run close to 125,000 Amazon-branded vans and trucks in the USA, could get cannabis to almost anyone in a legal state who wanted it.

Competition and efficiency of trucks would require UPS, FedEx, and the USPS to have the same rights, hence, full fledge legalization that looks a lot like the Republican’s plan for federal marijuana legalization.

Yes, Amazon would be in the weed business, but you would have full marijuana legalization in America.


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