How would the marijuana industry deal with a potential recession?

A year ago there was only whisper of a recession. Now it’s starting to dominate conversations, worrying businesses and citizens about the coming months.

A recession is by no means certain, but experts say the likelihood is higher than before. “The probability of a recession in the next 12 months is now 30%, the highest since 2020,” corresponding Bloomberg. That number, they said, is double the odds predicted three months ago.

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It’s no secret that this country is going through some pretty shaky and uncertain financial times. Interest rates are rising, there have been ongoing supply chain issues, a weak stock market and an ongoing war in Ukraine that shows no signs of easing anytime soon. “Bleak” is a word we all hear more these days than we’d like.

But just because many facets of the economy and daily life have been negatively impacted, does that mean the cannabis industry will also take a nosedive? Or can it thrive in these trying times? After all, the industry has shown impressive gains during the pandemic while so many other industries have been on the brink of collapse.

The answer to these questions is a bit complicated, but there is hope that cannabis, while not recession-proof, can fare much better than other industries during tough economic times. Corresponding Invest daily“Many cannabis stocks have entered the downtrend as investors switch into risk-off mode,” but that “cannabis stocks are likely to embark on an even sharper uptrend when the broader market reverses.”

In other words, while cannabis stocks and the industry aren’t immune to the economic downturn, they do have a track record and the ability to bounce back and soar higher than ever.

While there is hope that cannabis can make a quick recovery, the fact remains that those with tighter finances may not be spending as much on marijuana. “Obviously the inflation factor is happening everywhere,” Aaron Smith, CEO of the National Cannabis Industry Association, said the Denver Postadding that some cannabis users are “probably cutting back on their use because they are having a hard time making ends meet or paying their bills.”

Even though many dispensaries offer their lowest prices with special offers and promotions, a marijuana budget may just not exist when a consumer is struggling to pay for basic needs.

It’s a harsh truth that the demand for cannabis is less than the demand for food and the cost of living, and some may be in a position where there is only enough money for the needs and not the wants. But while a bit of financial gloom may be a long way off, there is also hope.

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Some places, like Rhode Island, are bullish on the marijuana industry. Corresponding NBC affiliate WJARthe state Department of Administration is forecasting $41 million in marijuana sales in just the first seven months of marijuana legalization in the state, beginning Dec. 1. So while the country is in many ways preparing for a potential economic downturn, some states like Rhode Island are doing so with hope that marijuana can bring welcome prosperity to their state’s economies.

Marijuana isn’t recession-proof, but it’s certainly a desirable product and resilient industry. It’s also a young business, and even if the economy in general takes a leap, marijuana is just beginning to test the waters in many states. This means that the industry has potential for growth, even if the country as a whole is experiencing a temporarily slightly contracting economy.