Is Cannabis Recession Proof? – Hemp | weed | marijuana

Is Cannabis Recession Proof?

During the last great recession in 2008 and 2009, there was no legal cannabis industry. Colorado and Washington only legalized it in late 2012. Canada did not have a leisure sector as of 2018.

We can look at tobacco and alcohol trends during recessions to make some predictions. But ultimately, we won’t know how cannabis is doing until there is a recession.

And it’s coming. Despite the government’s redefinition of the word, a recession is an inevitable consequence of credit expansion.

So is cannabis recession-proof?

What is a recession?

Before we answer the question of whether cannabis is recession-proof, let’s define recession so we can all agree.

Since 1999 there has only been cheap credit, followed by even more cheap credit.

In a free market economy, people lend money through their savings and investments. “Cheap” credit is the result of an ample supply of capital.

In this corporate-state economy, credit is a political instrument set by unelected and unaccountable central bankers.

“Cheap” credit is created when interest rates are kept well below market levels.

But you can’t sustain a complex, capital-based economy with bogus numbers conjured up on a computer screen.

The result is a conflict between accounting and real scarcity.

Money needs scarcity to function properly. Money is one side of every transaction. We don’t have a free market unless the money is market based.

We have given unelected bankers extraordinary powers by separating the market process from a gold standard.

Exceptional powers that allow the growth of the corporate state and its wars of aggression. Powers that undermine liberal democracy, free markets, private property and the rule of law.

Is Cannabis Recession Proof? Examples from alcohol

Oxford Academic published a study on alcohol trends during the 2008 recession. They found that heavy drinkers increased their consumption while light drinkers decreased it.

The idea was that people who lost their jobs or homes were stressed and drank more because of it.

The study states, “These results are consistent with the existing literature, suggesting that single men and the recently unemployed are most likely to drink excessively during economic crises.”

The demographic most likely to consume alcohol during a recession? 25-34 and 55-59 year old males. The same demographic group that divides the cannabis industry.

Is Cannabis Recession Proof? Examples from tobacco

A study published by the National Library of Medicine examined tobacco use during the 2008-09 recession.

They found “newly reported tobacco use” and even among the poor, “persistent tobacco use” remained unchanged.

Despite having less money and “feeling worse,” consumers continued to spend on cigarettes because they believed it relieved stress.

The researchers wrote, “Among a sample of mothers with low socioeconomic status who had previously quit smoking, they had difficulty coping with everyday problems, stress, and financial pressures.”

Is Cannabis Recession Proof?

Cannabis is a stress reliever and unlike tobacco or alcohol, it will not slowly kill you while you are consuming it.

For these reasons, we believe cannabis is recession-proof to some extent. Saturated markets like Ontario’s retail cannabis market may experience economic pressures. But overall, the cannabis industry will weather the storm.

The question is: which cannabis industry?

Suppose consumers are stressed about money and legal cannabis prices in Canada are too high. In that case, consumers are more likely to patronize legacy markets like BC Bud.

Consumers are also more likely to grow their own.

And this will not only happen in Canada, but in any jurisdiction struggling to compete against legacy markets.

Canada’s legal system may weather the storm better than its US counterparts. Until the Biden administration legalizes cannabis nationwide (if it ever happens), US cannabis producers and distributors are still struggling with the banking sector.

Throw in a recession and many may close up shop altogether or return to the underground legacy market.

So is cannabis recession-proof? For the most part yes. Just as tobacco and alcohol survive and become more prevalent during troubled times, so is probably cannabis.

There are winners and losers, and given the corrupt nature of governments, large cannabis producers could even be bailed out if the smaller companies go bankrupt.

Whatever the outcome, a recession is inevitable, but cannabis will survive it.