In my opinion, any predictability that was left in the cannabis industry has effectively gone up in smoke due to the potential health risks and disruption brought on by the novel coronavirus pandemic. With the spread of the virus, affecting not just individuals, but capital markets, supply chains, and work environments as well, the already challenged US cannabis industry now faces even further risk of destabilization.
The history of the state-legal cannabis industry has always seemed to be one of non-stop bobbing-and-weaving, reacting to each new legal development, regulatory change, source of capital. As capital markets dried up over the past few quarters, operators have had to add liquidity risks to that list. Now, with in-place sheltering and social distancing, and volatility in the broader equity and debt markets, companies may now have to regroup again and find novel ways to keep business flowing to service the demand that exists.
Broader regulatory measures for sure would help – short of descheduling non-hemp cannabis, a waiver of 280E by the IRS or the federal bankruptcy courts allowing access to the industry would each certainly go a long way to alleviating the short- and mid-term issues facing the industry (in my opinion, much more than the SAFE Banking Act). The Michigan Marijuana Regulatory Agency, for its part, just authorized home delivery and temporary drive-through sales (link). However, with the federal government appropriately focused on the pandemic response, operators are once again going to have to pivot and react, working together as a business community to share resources, communicate ideas, and rely each other (including their lawyers! - for example, my firm’s coronavirus resource page) for the sake of the entire state-legal industry.