As 2019 drew to a close, no one expected the virus that had been discovered in Wuhan, China in November to bring the world to a complete standstill. Three months into the year, however, the resultant pandemic had caused massive damage to the economy, with industries like food service and airlines shouldering millions of job losses. Although cannabis products enjoyed a spike in sales in the week or two leading up to lockdown orders, the COVID-19 pandemic has since dampened CBD sales.
The nascent industry had previously seen extremely encouraging projections, with last year’s BDSA and Arcview Market Research industry report stating that CBD sales in the USA would surpass $20 million by 2024. However, according to a new report from Brightfield Group titled ‘US CBD Market July 2020’ CBD sales will be much lower than projected due to the coronavirus pandemic. How exactly has the pandemic affected current and future CBD sales in the country?
Stay at home orders coupled with social distancing have almost killed businesses which solely depend on their brick and mortar locations. The report by Brightfield Group noted that this would result in loss of revenue from store closures as many CBD retailers had either closed temporarily or were only offering curbside pickup or delivery.
“Even for CBD specialist retailers and smoke shops that remain open, they are experiencing steep declines in sales as social distancing guidelines and consumer worries about contracting the coronavirus keep shoppers at home,” the report says. According to Brightfield, nearly half (45%) of CBD consumers surveyed in June said they had moved their CBD purchases online, locking out up and coming players who didn’t already have infrastructure for online ordering and home delivery.
Reduced or no income due to job loss. The coronavirus pandemic has devastated the job market, with more than 20 million Americans losing their jobs since January. And as anyone who’s bought high quality CBD can attest, it isn’t cheap. And “with Americans facing high unemployment levels (11.1% in June 2020 compared to 3.8% in February 2020) year 2020 retail sales are not expected to reach levels anticipated prior to the emergence of the COVID-19 pandemic,” the report says.
As of July 14, over 30 million Americans were receiving unemployment benefits and for many of them, that’s the only income they can bank on, so CBD will probably be the last thing they want to buy. With the end of the coronavirus pandemic nowhere in sight, we can assume the economy will keep on declining, and CBD sellers who are able to adapt to the new times by incorporating online ordering, curbside pickup and home delivery will be able to weather the storm.
This less than favorable outlook for the CBD sector is likely to give industry players like The Alkaline Water Company Inc. (CSE: WTER) (NASDAQ: WTER) food for thought as they plan for the coming years since the changes in consumer behavior may not go away once the pandemic ends.
CNW420 spotlights the latest developments in the rapidly evolving cannabis industry through the release of two informative articles each business day. Our concise, informative content serves as a gateway for investors interested in the legalized cannabis sector and provides updates on how regulatory developments may impact financial markets. Articles are released each business day at 4:20 a.m. and 4:20 p.m. Eastern – our tribute to the time synonymous with cannabis culture. If marijuana and the burgeoning industry surrounding it are on your radar, CNW420 is for you! Check back daily to stay up-to-date on the latest milestones in the fast -changing world of cannabis.
To receive instant SMS alerts, text CANNABIS to 21000 (U.S. Mobile Phones Only)
For more information please visit https://www.CNW420.com
Do you have questions or are you interested in working with CNW420? Ask our Editor
CNW420 is part of the InvestorBrandNetwork.