IRVINE, Calif., STAMFORD, Conn., and LOVELAND, Colo. – The New York Stock Exchange (NYSE) on Tuesday saw the greatest one-day gain since 1933 (in the midst of the Great Depression), as Wall Street anticipated approval of the trillion-dollar COVID-19 stimulus package, which might stave off destruction of entire economies, industries, and markets around the world.
For investors and traders, the ride is staring to feel like being on a cruise ship adrift in stormy seas, driven by sentiment based in fear of mortality itself, as the U.S. seems to be about to experience the epicenter of the coronavirus pandemic, which according to health officials has yet to crest.
Confusion reigns for many small businesses, including cannabis businesses; employees are being furloughed and laid off, the wholesale supply chain may suffer the effects of increased demand and less ability to service routes while short-staffed due to the outbreak, and the future is unclear.
Irvine, California-based, online cannabis platform Leafly on Monday was forced to layoff ninety-one employees. Tech news site GeekWire.com interviewed Leafly Chief Executive Officer Tim Leslie, who said, “We’re heartbroken to have to let so many talented people go in such an uncertain time.”
Leslie cited investment funding that had been frozen as a result of the coronavirus crisis, and said that scaling down to 140 employees would allow the company to remain solvent through the ongoing pandemic. Leafly has had to lay off nearly 50 percent of its staff since the beginning of 2020.
Spot price index Hemp Benchmarks posted a report on the potential effects of the coronavirus crisis on the hemp industry.
Tradeshow schedules have been disrupted, the report said, including the 7th annual NoCo Hemp Expo; usually held in Denver in March, the event has been postponed to August.
Hemp Benchmarks also highlighted difficulties with the supply chain, affecting hemp cultivators and processors. Product containers, like jars and bottles, have been in short supply since the pandemic has slowed trade, especially from China.
The report quoted a statement from cannabis packaging company KushCo’s Chief Operating Officer Rodrigo de Oliveira:
“With the recent coronavirus outbreak, our business was briefly and minimally affected by temporary [Chinese] factory shutdowns, production delays, and product shortages,” he said. “Fortunately, we entered Chinese New Year with healthy inventory levels, whereas some of our peers who don’t have the same scale, resources, supplier relationships, or inventory quickly ran out of product. Overall, we’re pleased to see the situation slowly improving and for new shipments to make their way into our warehouses again, from which we can accelerate our sales again.”
Seventy-one Canadian cannabis firms wrote a letter to Finance Minister Bill Morneau and Industry Minister Navdeep Bains asking for wage subsidies to be made available to small businesses, struggling to weather the pandemic crisis. Federal agencies Export Development Canada and the Business Development Bank of Canada, according to media reports, have indicated cannabis businesses may not be able to access $10 billion in stimulus funding available from the Canadian government.
Canadian news site TriCityNews.com pointed out significant challenges for Canadian cannabis corporations and said, “In the past six months, industry funding has been drying up as thousands of cannabis workers were laid off from flagship cannabis brands such as Aurora Cannabis Inc., Canopy Growth Corp., and Tilray Inc.”
Hemp Benchmark also speculated about whether CBD retailers would be considered “essential services,” as cannabis dispensaries and retailers in several states have, allowing them to do business under “safe at home” protocols being used to curb the coronavirus spread.
Law firm Thomson Coburn LLP offered insight for cannabis business owners in regards to how the COVID-19 pandemic may affect various contracts, leases, and loan agreements, as well as federal employment and sick leave legislation, in connection to situations that could result from the pandemic, while acknowledging that the situation is fluid and many unknowns remain for small business owners in multiple sectors.