The COVID-19 pandemic has brought the global economy to its knees. As the cases keep increasing and impacting people worldwide, economies and businesses keep paying a price. Many cities and countries have closed all non-essential businesses. Luckily, Canada announced that marijuana is an essential item. The demand for medical marijuana across the US also forced many states to make it as an essential item. The classification led to increased marijuana sales. However, the marijuana industry continues to struggle with many other issues.
How’s the marijuana industry coping with COVID-19?
Since marijuana is an essential item, some businesses have seen a spike in sales. However, some of the companies already struggled with financial problems. Now, businesses wonder how they will survive amid the pandemic. Many companies had to shut down. People have to stay home to help contain the virus.
A Marijuana Business Daily article discussed that cannabis companies have adopted different strategies amid the pandemic. Some companies hired more employees so that existing employees don’t get overloaded with work. Other companies terminated employees to avoid social interactions and conserve cash. Many businesses adjusted shift hours, added work-from-home options, and expanded other facilities.
Some cannabis companies hired temporary workers to handle the volume. Currently, there’s more demand for cannabis, which increases sales. Overall, cannabis companies continue to struggle in the US. Cannabis still isn’t legal at the federal level. As a result, most small cannabis businesses don’t have access to emergency federal business relief. However, many senators want cannabis companies to get financial help during this time. To learn more, read Cannabis Sector Gets Support for Federal Business Relief.
Companies took drastic steps
Recently, Canopy Growth (NYSE:CGC)(TSE:WEED) temporarily shut down all of its company-owned Tokyo Smoke and Tweed retail stores amid the coronavirus outbreak. The company owns 23 retail stores located in Newfoundland, Saskatchewan, and Manitoba. Canopy Growth closed its stores in order to limit social interactions.
On April 6, OrganiGram (NASDAQ:OGI) also announced that it will temporarily lay off 400 employees amid the lockdown. The company has to ensure that employees maintain social distancing. OrgaiGram will pay a lump-sum amount along with other facilities to 45% of the employees that have been removed. The company will also adopt additional measures to deal with the pandemic and stay operational. To learn more, read OrganiGram to Reduce Workforce by 45% Due to COVID-19.
The marijuana industry’s struggles haven’t ended. Temporarily closing stores and laying off employees will take a toll on companies’ production. Will the surge in cannabis sales be enough to help the companies recover from their losses? Read What Can You Expect from Marijuana Stocks in April? to learn more.