The market had declined in the last months as the long-expected recession became real, due to the COVID-19 pandemic issues. Some businesses could barely increase or just stay stable. All companies, families, and everybody in the affected areas are consuming less and expending less while some operations, considered “essential business” are still active and thriving. One thing is certain: the internet and delivery companies have many more opportunities now when everybody stays at home.
Let us consider those related to the cannabis industry. I was reading the story “Cannabis Stock Investing: How Is COVID-19 Affecting This Profitable Marijuana Company?” written by Beth McKenna from “The Motley Fool”. It shows how some companies, like the Innovative Industrial Properties (NYSE: IIPR), having consistent performance, are being good targets for investments. The IIPR case is somewhat interesting as they present themselves as the pioneering real estate investment trust for the medical-use cannabis industry. Real state means properties for cannabis cultivation.
If those places are growing it’s obvious all medical-use cannabis market is growing and the complementary companies related to commerce and delivery will have increases, as well, at some point this year. Considering the “new normal”, we can infer people will prefer to receive the products in their houses and will prefer buying medical marijuana via e-commerce.
We see also that many companies in the young industry are losing money as they invest heavily in equipment and growth. As a result, many investors focus on revenue growth rather than earnings. For me, it’s very clear we need a more bold investment in the “only delivery” medical marijuana companies, where the products will be distributed and sold around the country with profitable earnings under legalized status.