Since late March, tens of millions of unemployed Americans have received an extra $600 a week in jobless benefits.
For many, this additional income is the only thing allowing them to meet basic needs like paying rent and buying groceries. For others, this new temporary benefit bump means workers are making more than they ever did on the job. Despite misguided claims that such a scenario speaks to the need for people to return to work, what the situation in truth reveals is an economy so broken that the lowest tier of employment is inferior to no employment at all.
One interesting wrinkle to all of this is how the cannabis industry has clearly benefited from Americans having more money to spend. Add in unprecedented levels of boredom and stress — plus cannabis being declared “essential” in jurisdictions across the country — and you have the recipe for strong sales at a time when many other industries are in freefall.
As always, the situation is a confluence of many things. That advances in technology have arrived in tandem with a need for cannabis sales to go virtual, curbside, and remote is no small miracle. For marijuana to be one of the few things an increasingly divided country still agrees on is also quite notable.
In states driven by resident (or local) sales, numbers are solid. By contrast, states that rely more heavily on tourism — Colorado and Nevada — have seen sales suffer in recent months. That makes sense, given travel restrictions and the closure of consumption lounges and other appeals of cannatourism.
Leaving the tourist-dependent jurisdictions aside, it’s clear that cannabis has (at least thus far) proven itself to be “recession-proof.” The term, though nebulous, speaks to the appeal of cannabis beyond it’s frivolous “vice” category. Yes, Americans seem to want alcohol and cannabis in record numbers these days, but it’s important to remember that the latter is not only a comfort, but a medicine.
That distinction is important as the window for Congress to extend the extra benefits past July continues to slam shut. Should the additional $600 stop coming, will weed sales suffer as a result?
No fancy math degree is required to do the back-of-the-napkin figures here. If people have less money to spend, less money will be spent. Andrew Livingston of the Denver-based cannabis law firm Vicente Sederberg summarized the situation thusly:
“I’m confident in saying that reducing an individual’s total earnings will affect the amount of money they’ll be able to spend on cannabis,” Livingston told Marijuana Business Daily. “But I would expect a larger impact on adult-use sales because medical patients treat cannabis a lot like their necessary medicine.”
Indeed, the distinction Livingston draws here is one that may ultimately be the biggest factor in determining where legal cannabis sales go from here: If Americans suddenly find their wallets emptier, will cannabis still be essential in their minds?
To further complicate the matter, we can’t ignore the reality of the unregulated market in this scenario either. Perhaps consumers are unwilling to pay legal prices without an added $600 coming in each week. Does that mean they will simply stop smoking? Probably not.
Instead, they will likely return to whatever illegal channels they were previously relying on. Or maybe they’ll decide to nurture a green thumb and grow plants of their own. The point is that a drop in legal sales would not definitively prove that consumers are de-prioritizing cannabis in their spending — it would only prove they’re not buying legal cannabis.
Caveats aside, many will be watching the market closely to see what happens in the weeks and months ahead.
Will legal sales plummet? Could customers now accustomed to the benefits of the regulated market decide they’re not looking back? Whatever happens, the numbers are likely to be messy and highly scrutinized regardless of what they suggest.
Of all the possible scenarios, however, the true tragedy is that one in which Congress simply continues to make it possible for their constituents to survive a pandemic without worry of choosing between medicine and shelter is apparently the unlikeliest of all. Sounds like a good reason to buy some cannabis, no?