Recession to prove difficult for cannabis companies

Recession to prove difficult for cannabis companies

As the global economy suffers from the effects of the Covid-19 lockdowns from the past two years coupled with the ongoing war in Ukraine investors are tightening their pockets and it could be cannabis companies that feel the pinch.

Bloomberg suggests that many companies involved in the cannabis industry could find it more difficult to raise starting capital amongst other issues.

This is of course not the only industry that is suffering currently. The global stock market has taken a large hit in recent months. Added to this the cryptocurrency market has taken a battering with Bitcoin dropping to $21,000.

Clearly, money worldwide is beginning to dry up and the environment is tough for many companies.

Yet much like how the drop in cryptocurrency could prove beneficial in the longer run for the industry by removing those out for a cheap win, the same can be said for the cannabis industry.

There are further positives for the medicinal marijuana companies despite the recession as more nations continue to explore the possibilities of relaxation regulation.

Patients will continue to require their medicinal marijuana as well despite the global recession offering some protection to the industry.

Within the UK only the medicinal marijuana industry is projected to reach £453 million by 2026 showing that despite global market conditions there is plenty of room for growth for cannabis companies.

News however for the CBD market looks a little more bleak with the UK and European Union looking at limiting edibles.

Much like other nascent markets it is likely that during this difficult economic period, only the strongest cannabis companies appear likely to survive.


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