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Why Cannabis Is An Essential Service. Interesting Read

[Goldy63]

In times of trouble, smart money investors have traditionally pivoted to safe haven assets like gold. But the COVID-19 global pandemic is a game-changer on so many levels, including how do we steer the financial ship through stormy waters It’s the kind of turbulence we’ve never experienced in out lifetimes.

Thus, governments around the world have developed strategies to help people cope with the most serious public health crisis in over 100 years. And part of it is helping people cope. That’s why provincial governments across Canada have deemed cannabis retailers an essential service.

For many Canadians, a glass of beer or wine or cannabis consumption is a welcome relief at the end of a stressful day – but are they essential services? Well, according to our government, they are, and that could be good news for investors looking for a bargain or two.

Let’s see why.

A new type of policy is being enacted on multiple levels of government – we’re in a state of emergency. The details of the legislation may differ slightly between municipalities and provinces, but it’s seeing leaders of all stripes shutting down “non-essential” industries and businesses to combat the spread of COVID-19.

On April 2nd, Canada’s federal government deemed medical cannabis production “essential” to the country’s critical health-care infrastructure during the coronavirus pandemic. Ontario briefly, removed cannabis from its list of essential services but quickly returned it.

The designation is intended to assist provinces, municipalities, and its businesses in their decision-making around the types of employees considered essential for the health, safety, security, and economic well-being of the country. Even though the governmental designation is nonbinding and advisory in nature, it is important to note because all cannabis production, including medical marijuana, is regulated by the federal government.

The government of Ontario’s decision that cannabis retailers are an essential service was good news for companies like Hobo Cannabis Co. The B.C.-based chain had opened two stores in Ottawa in the past two weeks, only to have them shut down on April 4th after the province narrowed the list of essential businesses that can remain open during the COVID-19 pandemic.

The Province of Ontario reversed that decision on April 7th, issuing an emergency order that cannabis stores are, in fact, an essential service in Ontario and can reopen. The change will help customers and store owners while helping to fight the pot black market, the government said.

Prince Edward Island was the exception, as it announced the closure of all 17 liquor stores in the province last month, the government there relented somewhat last week, allowing a single liquor store to reopen.

Fortunately, it appears as though, Alberta is going to continue its sensible approach on this question. On March 27th, the province confirmed that liquor and cannabis stores are being treated the same as grocery stores and may remain open.


When you think about it, it’s quite remarkable how in less than two years we have gone from the criminalization of cannabis to serious conversations as to whether those selling it are providing an essential service.


The Economy of Cannabis

The production and retail sales of alcohol and cannabis represents thousands of jobs and economic activity that are in short supply at the moment. That should give us additional pause when it comes to shutting down this aspect of the economy.

For one thing, it seems illogical and unfair to treat cannabis retail stores differently than liquor stores. If one is allowed to stay open, then the same should go for the other. Certainly, from a public health perspective, steering cannabis users to the black market seems unwise.

Secondly, if liquor stores are allowed to deliver directly to their customers, then the same should apply to cannabis retailers. As it stands now, cannabis retailers are prohibited from making deliveries. But here’s why the same logic applies – if a store is allowed to remain open, and they have the option of delivering directly to customers, thus negating the need for those customers to leave their homes in the first place, then we should be encouraging that, not preventing it.

Ultimately, even with shrewder policies in place, there’s no avoiding the fact that these sectors – like so many other sectors of the economy – are going to suffer economically. As a result, it was encouraging to get confirmation over the past weekend from the Business Development Bank of Canada that the country’s cannabis sector, as well as bars and lounges, will indeed be eligible to access the $40 billion in new credit that’s being made available to help businesses get through this crisis.

In the meantime, though, we can now responsibly allow alcohol and cannabis retail stores to stay open. We should give them the flexibility to find new and different ways of safely connecting with their customers.

Everyone is in this together. Keep calm. Carry on