Coronavirus And Its Impact On The CBD Market

One of the last things that the CBD market expected to confront this year is a global pandemic but that is exactly what happened. The coronavirus COVID-19 is blasting economies across the globe and economies have to face very tough times.

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The outbreak of the coronavirus has sent the global economy into a downward spiral, dragging with it all the markets, including that of cannabis and all cannabis-related derivatives. For those who invested in cannabis stocks via exchange-traded funds, it has not been the best of times. Brands like Horizons Marijuana Life Sciences Index ETF (TSX:HMMJu), Alternative Harvest (NYSE:MJ)and a host of others suffered steady plunges until their stocks reached an all-time low. It was nothing but bad news for the investors and other stakeholders.

In the United States, the cannabis industry took a particularly bad hit. Starting from the spring of 2019, sales started nosediving, debt profiles became worse and regulations did not help. All sectors of cannabis and cannabis derivates. Supply chains became disrupted and spending by customers dropped off rapidly as the virus spread swiftly from China to other parts of the globe.

Interestingly, the popularity of CBD brands remained consistent with the populace even if that did not necessarily translate to higher volumes of sales or maximization of revenue for these enterprises. The same thing applied to thecoronavirus outbreak is delaying the initial public offer. A very good example in this regard is the New York-based CanaFarm Hemp Products had its trading delayed on the Canadian Securities Exchange (CSE). The date for the listing had to be changed because the company made the specific request. This was particularly because of the coronavirus pandemic which is shaking the global economy to its foundations.

It is expected that the delay is also going to affect the issuance of new shares to the investors. CanaFarma, a brand that is known for its CBD/hemp oil-infused chewing gum is going to trade under the name ‘CNFA’. Established in early 2019, the brand stated that it was going to go ahead with a reverse takeover in partnership with KYC Technology.

Another aspect where the pandemic has affected the CBD industry is in the area of insurance policies. Even though many cannabis ventures have general liability insurance packages in place, these packages have no provisions for business disruptions or a pandemic like the one they are witnessing now. There is also a drop in productivity as workers can no longer work and many have been forced to have their CBD businesses shut down till further notice.

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Written By: Dawn richard