Research Study Shows States with Legal Cannabis See Fewer Pharmaceutical Sales
A recent research article shows that the pharmaceutical sales industry takes a hit in states that legalize cannabis. The article was published in the journal PLOS ONE and analyzed data from prescription drug sales and stock returns for 556 pharmaceutical companies from 1996 to 2019. The data showed that stock returns declined in response to both recreational and medical cannabis legalization. The study authors also found that legalization caused annual pharmaceutical drug sales to decrease by about $3 billion.
Detroit Begins Accepting Applications for Recreational Cannabis Business Licenses
Michigan officially launched adult-use cannabis sales in December 2019. However, Detroit’s City Council prohibited any cannabis sales until it had time to establish its own rules and regulations. Detroit opened its application process in April 2021, only to have a federal judge shut down the program amid legal challenges. But, the City Council finally opened the application process on September 1st. Officials from the state’s most populous city plan to issue 160 total licenses in three phases.
Cannabis Businesses Are Taking a Hit Amid Economic Fears
Cannabis companies large and small are falling victim to the current uncertain economic climate. Businesses that directly touch the plant as well as tech and software companies that support the industry are laying off employees and closing cultivation and retail facilities. Cannabis companies in 30 states were deemed essential businesses during the height of the Covid-19 pandemic, and many in the industry benefited from the “essential” status. But like many other mainstream businesses, the cannabis industry is struggling to regain its footing after the uptick in demand during the pandemic. There are several factors contributing to the layoffs and downsizing, including the continued fall of wholesale cannabis prices and consumers who now find themselves more cash-strapped.