Friday, June 12, 2020
Coronavirus Threatens To Smoke Cash Flows
By Joan Oleck, Forbes Consumer-Tech Contributor
June 11, 2020
In a world suddenly disrupted by coronavirus (COVID-19) and its fallout — anxiety, the market free fall, increasing instances of self-quarantine and a consumer stampede every time hand sanitizer reappears on store shelves — the cannabis startup universe is no exception.
“The way that we are changing our business is that we are not doing live meetings or attending or speaking at events,” shared Wendy Robbins, half of the entrepreneurial duo (with Karen Paull) behind Amazon Prime’s The Marijuana Show.
“We’re not producing videos outside of our home, not traveling,” Robbins reported by email of hers and Paull’s new business routine. “Our biz now is 100 percent on the phone or Zoom for video meetings.”
Robbins and Paull are hardly alone: “We’re in the middle of this capital crunch – this Darwin phase, we like to call it,” Morgan Paxhia, managing director of Poseidon Asset Management, told MJBiz Daily. Paxhia said that the already-tight outlook for capital in the cannabis industry is being exacerbated by the virus and could result in some companies in the category failing altogether.
Of course, there’s the Small Business Administration’s recent offer to designated states and territories, of low-interest federal disaster loans. These loans would provide working capital to small businesses suffering substantial economic injury as a result of the coronavirus. And that might help cushion the blow for cannabis companies.