Is the cannabis industry recession proof – this question has been raised many times in the wake of the COVID-19 pandemic. The response I’ve heard from well-educated people that I respect, financial advisors and the like, seems to be a resounding yes. But is the answer really that simple?
I see the demand for cannabis as indeed recession-proof. And we have seen this corroborated in rising sales between the medical and adult-use marijuana sectors since this pandemic began. However, how can we say that the cannabis industry itself is recession-proof when we can’t even agree as a country, as a state, let alone, a region or a world what the so-called industry really is?
The Cannabis Industry is Made Up Of Two Sides
In legal terms, the cannabis industry is made up of two sides – the marijuana side and the industrial hemp side. In real world terms, you have to consider that marijuana, cannabis, and hemp, and the legalization and resulting industries, mean different things to different people and cultures around the world.
In Canada, cannabis regulation may have been spurred by health purposes. For Latin American countries, legalization may be spreading to eliminate the narco trade or to provide economic development. In the European Union, it seems to be all in on medical cannabis and how it can be used to develop formulas for alternative medicinal or therapeutic treatments. In Africa, cannabis and hemp legalization may offer a path to a sustainable commodity that can help strengthen local and regional economies. In the U.S., hemp legalization was spurred to support the struggling agriculture industry and American farmers.
What Defines the Cannabis Industry?
We don’t have a common understanding, nor do we have a common public policy or legislative framework anywhere around the world. Does the cannabis industry mean marijuana? Is it hemp? What about CBD?
You might have a dispensary owner in state X saying all I can do is operate in my particular state so why does any of this matter to me, why should I care about what is happening outside of my region or my country?
We need a change of focus. At the global level we need to make decisions that are not based on the same kind of narcotic reform policies that have been unsuccessful for decades. The focus needs to be on the international cannabis economy. That is because the cannabis plant represents an emerging global commodity.
Under the United Nations convention, the cannabis plant is already regulated and addressed by its particular uses. We’ve talked previously about the four regulatory lanes of the cannabis plant – over the counter, pharmaceutical, wellness and food, and industrial, but those lanes need to be carved out and need to be specifically identified with model legislation and model policy around the world.
Without a common understanding and a common definition of the cannabis industry, how can we truly answer whether or not this industry is recession-proof?
What we’re doing as lawyers, in lockstep with so many hard-working folks around the globe, is trying to connect the dots. We’re trying to define this industry so that we can further policy at all levels of government and advance both the industry and the collective consciousness of what comprises this industry. It doesn’t need to be shrouded in mysticism anymore. We cannot prove this industry is recession-proof or depression-proof until it is defined. For now, the first step is to come to an agreement of that definition. Stay tuned.