Cannabis joints shaped in an X

US cannabis sales question myth that unemployment benefits are spent on pot

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As sales of cannabis in the US dramatically increased earlier this year, critics were quick to point out that Americans were spending their coronavirus unemployment checks on cannabis. 

Turns out, that may not be true.

Data presented by Seattle-based data company Headset has tracked American’s spending since January. As the pandemic became “real” in March, sales of marijuana in California, Colorado, Nevada and Washington State decreased $20 million in a week.

In early April, Congress passed emergency legislation giving unemployed Americans $600-a-week in benefits. Several days later, sales suddenly rose again – leaving economists worldwide to theorise that Americans were spending their unemployment checks on cannabis. 

These sales continued throughout the pandemic, with America spending nearly $80 million weekly on cannabis. Before US congress took a break in August, they were scheduled to pass an extension that would continue nationwide unemployment benefits.

Unfortunately for jobless Americans, this never came to fruition. 

2020 weekly cannabis sales in the US 2
2020 weekly cannabis sales in the US (source)

On August 1st, America’s unemployment checks ceased. Despite panicked predictions that cannabis sales would fall, they’ve remained steady nearly a month later. Although purchasing habits change slowly over long several months, even cannabis users expected cannabis sales to plummet – so what happened? 

Honestly, there’s no good answer. 

Like alcohol, cannabis is considered an “inferior good”. In times of negative economic cycles, people spend more money on inferior goods. As things return to normal, spending decreases.

While cannabis consumption rose dramatically during the pandemic, sales may have increased as a result of American’s spending less money on entertainment and more on at-home activities, according to Headset’s Director of Analytics, Liz Connors

Alternatively, the COVID-19 lockdown could have put a spotlight on the cannabis industry, which was already experiencing major growth.

While there is little data on unemployment and cannabis, it’s also possible that blaming increasing cannabis sales on unemployment benefits is just another example of the stigma surrounding cannabis. As Benzinga wrote earlier this year:

This lingering stigma is due course after more than 80 years of fear-based messaging from people in power. Those messages were scary, and there was never any credible science to support them.

While cannabis sales can’t tell us the whole story on unemployment spending, its certainly opened a conversation about cannabis and stigma. To read more about Australia’s cannabis conversation, click here

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Based in Victoria, Karie's passionate about pro-cannabis legislation in Australia. She's joined Pondering Pot to share and bring awareness to the latest cannabis news across Australia.

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