The cannabis sector appeared in a dire position heading into the coronavirus outbreak. The sector was generally unprofitable and needed additional capital to grow so an extended shutdown of retail stores would have crushed the stocks.
Ultimately, most states considered cannabis stores as essential during the shutdown of most retail stores. The inclusion of medical cannabis in most recreational stores ensured consumers had access to these stores whether just for delivery or curbside pick-up. Only a few states such as Massachusetts and Nevada closed stores during the virus outbreak.
The large multi-state operators (MSOs) with access to cash and open stores generally thrived during the time when most retail struggled. After coming through the worse possible period and surviving a recession, the proof of concept is even further boosted.
Most MSOs are now poised to benefit from the optionality of states approving recreational cannabis in key states such as Arizona, Florida, New Jersey or Pennsylvania. The New York governor recently reinforced the plans to approve recreational cannabis due in a large part to the reduction in tax revenues this year due to the economic shutdown from the virus.
The ultimate gift for shareholders could exist from the Safe Banking Act getting approved via current legislature in the House as part of another round of stimulus. Over 34 state Attorney Generals approve the passage of the bill to eliminate the handling of cash, amongst other reasons.