Medical Cannabis Market

Countries and various industries were trying to deal with the challenges thrown up by the novel coronavirus (COVID-19). One such industry surrounded by the uncertainty of the impact of COVID-19 is the healthcare industry. Social distancing requirements, sharp cuts in consumers' discretionary income during the COVID-19 crisis, and governmental policies have hit patients' ability to undergo diagnosis of diseases and treatment of medical conditions. Numerous hospitals and clinics lack the necessary personal protective equipment, affecting the availability of treatment facilities.

The COVID-19 pandemic has disrupted the supply chain and interrupted the entire value chain of the global medical cannabis market, from raw material procurement to manufacturing, packaging, and distribution. For a short time, the impact did not appear to be significant because several manufacturers had the required raw material and end-product stock.

The potential impacts of the COVID-19 pandemic on the medical cannabis market are as follows:

Decline in production activitiesShutdown/reduced activities Negative impact on money flow

The production of products based on cannabis starts with the procurement of raw materials. Owing to urgent measures taken across the globe, raw material sourcing became a bit difficult. Some urgent measures were taken by the governments of certain countries, such as physical distancing and the limitation of transport, to fight surge capacity. Apart from this, the medical cannabis market was also facing restrictions on the workforce in the first half of 2021. The workforce required to source the raw material, process the raw material into the final product, and transport the final product to the end users was impacted to a certain extent.

The COVID-19 outbreak has been spreading rapidly globally. However, due to the high demand from patients, the demand for medical cannabis has not been significantly hampered. Additionally, failure to access healthcare facilities is anticipated to increase the demand. Baker Tilly US LLP, an advisory, tax, and assurance firm, observed that marijuana sales boomed in 2021. Between panic buying, increased stress amid a global pandemic, and inclusion on the essential businesses list, cannabis sales grew exponentially in 2021. America purchased nearly USD 18 billion worth of cannabis products in 2021, marking a 67% increase over sales in 2019. Illinois, US alone sold more than USD 1 billion in legal cannabis in 2021.

The changing regulations at the international level were anticipated to standardize norms at national levels. For instance, in April 2021, the legal amendments at the federal level in the US for the distribution and sale of cannabis were made to mitigate the impact of COVID-19. Similarly, 22 US states had initiatives for legal reforms in 2021. In June 2021, there were 10 bills at the federal level, and 32 states were amending their current regulations for reform. For example, in January 2021, the Idaho 1017 bill was introduced to raise the allowable THC level in products from zero to 0.1% THC. The Alabama Compassion Act for the legalization of (non-smokable) medical cannabis was passed by the Alabama Senate in February 2021 and by the House in May 2021. Similarly, Kansas Senate Bill 92 was introduced by the Senate Commerce Committee and aimed at establishing the Kansas medical cannabis agency within the Kansas Department of Health. The SAFE Banking Act is intended to allow banks to provide services to cannabis companies in states where cannabis is legal. Hence, the increases legalization of medical cannabis in countries during the COVID-19 pandemic has fueled the market.

A recent study published in January 2021 in Aging, a bimonthly peer-reviewed open-access biomedical journal, has found that cannabis may offer some help to patients with COVID-19. Cannabis sativa, an annual herbaceous flowering plant indigenous to Eastern Asia, was found to reduce inflammation and fibrosis. TNFa and IL-6 were the cytokines reduced in patients with acute respiratory distress syndrome. Similarly, a 2021 mouse-model study found that CBD, an active cannabinoid compound found in cannabis, reduced inflammatory cytokines and improved the clinical symptoms of mice with symptoms similar to COVID-19. The COVID-19 pandemic has opened a new opportunity for researchers to explore applications of opioid-based products for patients suffering from COVID-19.

Many states in the US have declared medical cannabis dispensaries to be essential businesses. California, Oregon, and Colorado permitted both medical and recreational cannabis stores to remain open during the pandemic. The stay-at-home orders by state authorities increased the need for supply chain activities for manufacturers and distributors. Many medical cannabis manufacturing companies faced issues and decided to mitigate the pandemic with strategic decisions. In December 2021, the Arkansas Medical Marijuana Commission disclosed that Arkansas dispensaries had total sales of USD 200.7 million of medical cannabis. There was an increase of USD 17.4 million as compared to November 2021. Medical Marijuana, Inc. (US) experienced gross margins for the company increasing from 76% in 2019 to 80% in 2021.

An analysis of the impacts of COVID-19 on Canadian patients purchasing medical cannabis through a survey in 2021 was done by Statista, a German company specializing in market and consumer data. The following graph includes the share (%) on various aspects of purchasing in 2021.